In a stark illustration of the economic fears still plaguing America, a resolution was introduced in the Virginia legislature on January 12 that would create a subcommittee to officially consider the adoption of an alternative currency in case of a total breakdown of the U.S. dollar and the Federal Reserve System.
Stocks retreated and commodities predictably soared Monday after Federal Reserve Bank Chairman Ben Bernanke told CBS's 60 Minutes that “it's certainly possible” the Fed could create additional “quantitative easing” beyond the $600 billion already announced. “Quantitative easing” is the modern term coined by Federal Reserve officials that means creating hundreds of billions of dollars in currency out of thin air, thereby inflating the currency, but hopefully not raising consumer prices beyond a target two percent per year.
As world leaders have gathered in Asia for the Group of 20 (G-20) summit to discuss measures to revitalize the frail global economy, tensions have risen over struggling currencies and trade. Likewise, President Obama and other world leaders in Seoul, South Korea for the two-day summit are having to contend with one another's opposing strategies for fostering a more stable economic environment and preventing a looming financial meltdown.
The United States would never, ever consider devaluing the dollar for export advantage, Treasury Secretary Timothy Geithner assured an audience of Silicon Valley business leaders in Palo Alto on October 18. “It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to (be) competitive,” Geithner said. “It is not a viable, feasible strategy and we will not engage in it.” Geithner’s words appeared timed to allay concerns about the U.S. dollar before this weekend’s G-20 meeting in South Korea.
The Associated Press reports that a government investigator has discovered that 89,000 stimulus payments of $250 went to people who were either dead or in prison. The 89,000 payments were among nearly 52 million sent to Social Security recipients and federal retirees as part of the mammoth economic recovery (stimulus) package enacted in 2009. In making the $250 payments, the government simply failed to confirm that the recipients were not incarcerated and not deceased.