Senior Obama Official: “We Are Going To Kill the Dollar”
Infowars posted an interesting clip of a Kyle Bass interview regarding the fate of the US dollar. Let's take a look at the video.
Here's the article reference: Senior Obama Official: “We Are Going To Kill The Dollar”.
Kyle Bass ...
"How do you solve a problem when you are running a 10% fiscal deficit. You are not going to get growth in the absence of private sector demand. So the government's idea now is we are going to export our way out of this. When I asked a senior member of the Obama administration last week, 'how are we going to grow exports if we do not allow nominal wage deflation?', and he just said we're going to kill the dollar. It's a dead answer but that's where we're headed".
How Realistic the Clip?
That video clip makes good copy. But how realistic is it?
Before answering, let me state that I am a Kyle Bass fan. Moreover, I do not doubt the conversation took place. However, I have to wonder about how serious the person was who said it, and I also have to wonder about how much influence that person has.
Nonetheless, let's assume the statement was not made jokingly. Let's also assume the person who made it can actually influence policy. Is that enough?
The answer is no, it isn't. QE is up to the Fed, not administration officials. Moreover, the QE point is moot, because if QE alone could destroy the dollar, the dollar would already be destroyed.
Spending money in large enough size could indeed sink the dollar, but that takes an act of Congress.
Problems do not stop there. For the US dollar to truly "be destroyed", the US would have to undertake actions well beyond those of the central banks and governments of Japan, China, UK, and Eurozone.
Japan seems dedicated right now to sink the yen. Will the US be more dedicated than Japan? Than China? than the UK? Maybe (let's even assume the US is more dedicated). In enough size to destroy? With this Congress? Will Obama be around long enough?
Those last three questions is an area where reasonable assumptions have to stop.
So, even with the many favorable assumptions I have made, color me skeptical on the notion the US is going to "destroy" the dollar vs. other fiat currencies any time soon.
However, given enough time, and at varying rates, all the central banks will destroy their currencies relative to gold.
Reader Abraham provides a link to the full session with Kyle Bass on AmeriCatalyst.
I am hosting an economic conference in April, in Sonoma.
Source: Global Economic Analysis
About Michael Shedlock
Michael Shedlock Archive
|07/18/2014||Phantom Liquidity and Perfect Pilfering||story|
|07/15/2014||Triple Whammy for German Economy||story|
|07/10/2014||$22 Billion in California Homes Sold to Chinese All-Cash Buyers||story|
|07/01/2014||Radical Stupidity: Academics Endorse $20,000 Income for Everyone, Working or Not||story|
|06/27/2014||Bitcoins to Become Legal Currency in California||story|
|06/19/2014||Interactive Look: How Small-Business Friendly Is Your City and State?||story|
|06/10/2014||Computer Beats “Turing Test” Convincing Some Human Judges It’s Human||story|
|05/29/2014||Google Unveils Self-Driving Car||story|
|05/23/2014||Amazon to Increase Robots from 1,400 to 10,000 by End of 2014||story|
|05/20/2014||World’s Unsold Cars Piling Up Everywhere: Fact or Fiction?||story|