Greenspan clashes with White House

[Say_What]

<clips>

The US Federal Reserve chairman fears the effects of floating China's currency

THE White House insisted last night that it still wants China to float its currency on world markets — despite a warning from Alan Greenspan that this would be a high-risk move posing serious dangers to global recovery.

The Federal Reserve Chairman’s stark advice on the potential fallout from a yuan float came in a letter that Richard Shelby, chairman of the US Senate’s powerful Banking Committee, released.

Mr Greenspan wrote that if China moved to abandon the yuan’s controversial peg to the dollar it could lead to a flood of money out of China, destabilising its financial and banking system.

The Fed Chairman went on to give warning that if this were to happen the resulting upheaval could also undercut recovery in America and around the world.

http://business.timesonline.co.uk/article/0,,8209-1023583,00.html

[Gman]

1. Good. Let it float

and complete the trashing of the economy by Bush. Get it all done by November.

[orwell]

2. Sell

China will do what 's in China's best interest. Right now that means pegging the yuan.

What King George doesn't realize and Greenspan is starting to is that it is all becoming moot. It won't be long before China holds the future of the US economy/currency in its grip. All it would take is some very large sell orders in the Treasury market to start the ball rolling.

The ineptitude of the Bush regime borders on treason.

O

[The Stranger]

3. I dont know if anyone else has noticed this, but the Chimp of late seems

to have fallen from grace with the powers that be. His nutcase-fundy support may be solid now, but not enough if the press and the monied classes abandon him.

[Crachet2004]

4. If Yuan floats, dollar=toilet paper...

Too many dollars out there NOW, as nations diversify their forex! Yuan-pegging keeps Yuan artificially low, and the dollar artificially high, improving China's competitive position.

Maybe jobs would be saved in this country, but what about inflation! I wonder what inflation really is today, counting all the 'discounted' items! I keep hearing our stock market is still overvalued...dollar becomes worth less=stock market retraction? I may be wrong, but it would seem the administration is insane! Or would the market inflate because our securities become cheaper to foreign buyers? Too many imponderables.

Obviously Bush has lost support of much of the 'old eastern money'-Kennedy, Rockefeller, Heinz, etc..., if ever he had it! But Greenspan is SWINGING-and that is the REAL money, the International Bankers. But I knew that from Soros' involvement.

Greenspan is an Icon to many in the investor class...and his comments alone can crash the market.