Wednesday, March 25, 2009

Geithner's Gigantic Gaffe


George Soros no doubt made a lot of money this morning from the latest Geithner gaffe. No wonder Soros, the greatest currency speculator of all time, is such a big Obama supporter.

Here's what happened, according to Bloomberg:

Treasury Secretary Timothy Geithner sent the dollar tumbling with comments about China’s ideas for overhauling the global monetary system, only to drive it back up by affirming that it should remain the world’s reserve currency.

Geithner was initially asked at a Council on Foreign Relations event in New York about proposals from People’s Bank of China Governor Zhou Xiaochuan for a new international reserve currency. He said “as I understand his proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.”

The dollar slid as much as 1.3 percent against the euro within 10 minutes of news accounts of Geithner’s remarks. The U.S. currency was down 0.6 percent at $1.3553 as of 12:31 p.m. in New York.

Roger Altman, who worked with Geithner as deputy Treasury secretary in the Clinton administration, later asked Geithner whether he wanted to “clarify” his remarks.
“I’d like to ask one final question, in effect on behalf of the market,” said Altman, founder of Evercore Partners Inc. “Let me ask the question this way. Do you see any change over the foreseeable future in the basic role of the dollar as the world’s key reserve currency?”
. . . .

Geithner responded by saying that “I think the dollar remains the world’s dominant reserve currency.” In an interview with CNBC broadcast after the event, the Treasury chief said that a “strong dollar” is in “America’s interest.”

Those minutes between Geithner's goofy remark and his "clarification" in response to Altman's softball follow-up question cost literally billions of dollars on the currency exchange. More than enough time for the likes of Soros, et al. to reap enough to finance the Obama's 2012 re-election campaign.

Geithnie, you're doing a heckuva job!
Update: Speaking of George Soros, the MailOnline reports his having pocketed $1.1 billion off the recession in 2008 through his hedge fund management. Soros boasted: "'I'm having a very good crisis." We can't wait to see this year's numbers.

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