Courtesy of Mish.
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.
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