Monday, 16 November 2009

Sufficient "duty of care" from the custodian of the global reserve currency?

The following two sentences from Ben Bernanke's address at the Economic Club of New York on November 16, 2009 are complete gems of obscurantism.

We are attentive to the implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability. Our commitment to our dual objectives, together with the underlying strengths of the U.S. economy, will help ensure that the dollar is strong and a source of global financial stability.

There is no specific articulation of a commitment to support the US dollar per se but rather an opinion being expressed that dollar strength will be a fortunate by-product resulting from the pursuit of the Fed's domestically focused dual mandate.

Does this statement reflect adequate duty of care from the custodian of the global reserve currency?

Let's see how convinced the forex market is in the coming sessions.

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