Yesterday Federal Reserve Chairman Janet “Grandmonster” Yellen gave a speech in Philadelphia that stopped trading on Wall Street as traders were glued to either CNBC or Bloomberg.
For me, there was one line that was an absolute lie. It caused be to say enough and turn off the speech. The Chairman stated that ,”And, since the beginning of the year, the dollar has been roughly unchanged against a broad basket of currencies”. Sorry but this was a flat out lie. The fact that she got away with this lie is even worse.
Since the end of 2015, the U.S. Dollar via UUP is down 5.20% through Monday’s close. UUP is designed to replicate the performance of being long the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc. That my friends is a broad basket of currencies.
The fact is UUP has fallen -5.11% since December 31st. In currencies, that is a decent move to the downside. To say it is flat, well that is just a fabrication of the truth or an outright lie.
The Federal Reserve wants and needs the U.S. Dollar to continue to fall so that commodities can rise and inflation gets back above 2.0%. By the way, this is good for stocks as a weak dollar will help earnings. The U.S. engine gets going and voila we have a world wide rally.
What I am upset with is the inability of the media to challenge the Chairman’s comment that there has been no change to the Dollar. Why is it that only alternative websites like IBankCoin have the guts to call a spade a spade or in this case a…
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so true I saw this too and thought “WTF?”
I’m not arguing one way or the other, but if the Fed does in fact want the dollar to fall so that commodities rise and thus that produces inflation, wouldn’t it be in their best interest to stop raising rates (or at least no more jawboning)? This only increases the dollar, which puts them in a merry go round monetary nightmare.