The Money Man Behind Rick Santorum: Who Is Foster S. Friess?
Savings Experiment: Snow Removal
Treasury Secretary Geithner, speaking from Tokyo, said that he wants a strong dollar and that the United States is determined to bring budget deficits down.
Mr Geithner has made this statement several times in the past. Yet, this year the dollar has fallen 7.6% and hit a 15 month low of 74.889 on Wednesday.
You are probably wondering why his words are being discounted. The dollar keeps falling. Let's look at the underlying conditions in the US economy that are working against a strong dollar.
Geithner cited unemployment as one factor. He said: "Unemployment is really very, very high, exceptionally higher in the United States. It is still rising. It's probably going to rise for a bit longer, until you see a longer period of growth take hold."
The fragile recovery we have will be "less driven by the consumer" according to Geithner. However, we must remember that the consumer accounts for 70% of GDP.
Now comes the clincher. Geithner further stated: "We're at a point now where I think we all recognize that although the world economy is now growing again, you don't have all the conditions for a self sustaining recovery led by the private sector."
If the private sector cannot lead the way, then the public sector must take over. To this point Geithner said: "It's going to take continued, carefully designed support from government policy as a bridge to that recovery."
So then, what can we conclude from all of this? We could say that our recovery is fragile at best. The private sector alone cannot drive the economy back to health. Therefore the burden falls back on the public sector or government to fill the breach. That could mean additional government spending and additional debt. To sustain a strong dollar against this backdrop of negative factors will take a dedicated focus.
Do you believe that the dollar will become stronger?
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
