Dollar Tumbles After Mnuchin Endorses Weaker Currency, Ross Speaks Of Trade Wars

Caught in a relentless downward spiral which has puzzled many a trader, it wasn't as if the US Dollar needed any help in accelerating its decline, yet that's precisely what happened this morning in Davos when none other than the US Treasury Secretary Steven Mnuchin "broke with tradition" of supporting the US currency, and said that he endorsed the dollar’s decline as a benefit to the U.S. economy.

"Obviously a weaker dollar is good for us as it relates to trade and opportunities,” Mnuchin told reporters on Wednesday at the World Economic Boondoggle in Davos. "But again I think longer term the strength of the dollar is a reflection of the strength of the U.S. economy and the fact that it is and will continue to be the primary currency in terms of the reserve currency."

Well, if China's ambitions are unchallenged, the dollar's reserve currency status may not be primary for long, but we're not there quote yet.

Meanwhile, the dollar tumbled on the news, with the Bloomberg dollar index sliding to its lowest level in three years, extending the recent slide amid investor concern over President Donald Trump’s protectionist agenda and a special counsel investigation stemming from his 2016 campaign.

Mnuchin shocked Davos participants because while it echoed Trump's own doubts over a strong currency, the Treasury Secretary's "mini QE" came as U.S. officials confront the global elite with their "America First" agenda.

As Bloomberg adds, just hours after the U.S. slapped tariffs on solar panels and washing machines, commerce Secretary Wilbur Ross, who spoke alongside Mnuchin, said more measures are in the offing. And there is no more efficient way to accelerate trade wars than to slam your own currency, making foreign exporters suffer. The only question is how will they, and everyone else, will respond.

And speaking of trade wars, Wilbur Ross said that "Trade wars are fought every single day... So a trade war has been in place for quite a little while, the difference is the U.S. troops are now coming to the rampart."

It’s a message Trump is likely to send in person on Friday when he becomes the first American president in 18 years to address the Davos gathering of corporate executives and investors.


J J Pettigrew Wed, 01/24/2018 - 06:23 Permalink are the Goldman Sachs people running ...central planning

Werent they BROKE in 2009?  Werent they part of the systemic problem?  Didnt they switch bank status from investment to commercial in the middle of the game? Who let them?  Wasnt their former CEO running the Treasury?

Didnt Mnuchin get the gift of that bank in Indiana, with the inside nod that the Fed would make all right, and in spades?

So the culprits run the show......

Wall street is fat, and the government is broke, and look who is pulling all the strings, still, 9 years later...

Quite a SWITCHAROO , huh?

Lets break all the poker chips in half so we can play for bigger stakes.

buzzsaw99 Wed, 01/24/2018 - 06:28 Permalink

a weaker usd is definitely a trump thing.  other nations do it to appease him, some of the stuff he does himself.  if he starts in with the tariffs on a huge basis then the currency wars will heat up again.  this should be another lesson to anyone who believes fundamentals trump politics.  also, using a weak usd like a tariff is retarded.  a tariff, you get the extra money.  with a weak usd, the overseas assholes get the extra money.  weakening the usd to stimulate demand for usa goods has been tried, it doesn't work well in the long term for a number of reasons.

fattail buzzsaw99 Wed, 01/24/2018 - 07:30 Permalink

Mnunchin is correct.  The trade wars have been going on since China entered the WTO.  Any country that prints its currency, mandates a credit bubble, mandates infrastructure and fixed asset investment, finances overcapacity of domestic industries to produce the infrastructure needed but dumps the excess capacity on the world market, subsidizes energy production; mines its own environmental capital of clear air, clean water, and fertile soil for economic growth; and willfully poisons its own citizens for a cheap buck; abuses its citizens because the government allows no labor standards;  is already involved in a trade war.   

Trump is likely putting on some meaningless tariffs to gauge a reaction and fulfill a campaign promise.   He could ramp them up, but I doubt he is serious long-term.

Of course, if he wants to strengthen the dollar all he has to do is reduce the deficit.

In reply to by buzzsaw99

nmewn Wed, 01/24/2018 - 06:31 Permalink

Queue up the long running debate on strong-dollar/weak-dollar!

I luuuv to watch Keynesians lie about the value they place on the peoples labor ;-)

MK13 Wed, 01/24/2018 - 06:34 Permalink

The end is far. Every crack in system is filled with more fiat and QE.

And it's dollar spike that ends this, not weakness. US corporations' earnings will kick butt. End is far.

ParkAveFlasher curbjob Wed, 01/24/2018 - 06:50 Permalink

US will have to keep tacking from strong to weak to strong to weak etc because until supply chains are predominantly native and/or controlled, weak dollar benefits from exported manufactured goods are offset by the buy / importation of their components.  This is why countries lurch toward colonialism.  Mnuchin (funny name, is it Irish?) and Co. are just playing numbers games.

In reply to by curbjob

buttmusk pc_babe Wed, 01/24/2018 - 06:47 Permalink

More wealth inequality is more like it with 1% reaping all the benefits of appreciating assets and inflation picking up substantially will be a big hit to the vast majority who have seen stagnant or declining real wages. Even if more business comes net net things won't get any better for workers since automation and AI will be eliminating tons of jobs.

In reply to by pc_babe

peterk Wed, 01/24/2018 - 06:50 Permalink


 thats worked wonders for  places like  zimbabwe , venezuale, mexico

making  america great again huh !!


Tolomeo J bones Wed, 01/24/2018 - 07:24 Permalink

“The Plan” is to take it as it goes, so everything will always go according to plan under Trump!!! That’s his knack, turn everything around that comes his way and send it back looking like it was the plan: If it’s bad shit, blame it on some one as I told you so; if it’s good stuff, then it was his idea because he’s a stable genius!!! In that sense, he’s just like any nepotistic despot that ever existed, though he’s right in a lot of things; like Inmigration, China, North Korea, Iran, Trade, etc... His style is to caothic and, like I said, the plan is to have no plan!!! Eventually that’ll be his demise!!! In the end, you can only have so many enemies and those that you thought close will desert his like he has the plague!!! So, USofA, prepare for Bernie 2020... That’s the real plan!!! 

In reply to by J bones

swmnguy Tolomeo Wed, 01/24/2018 - 10:04 Permalink

Very true, that is and always has been Trump's approach.

Wilbur Ross has only ever done one thing, and that's pick at the bones of bankruptcy and liquidation operations.  Installing him as Secretary of Commerce told tale, very loudly to those who were watching.  Placing Mnuchin as Secretary of the Treasury reinforced the story.

People paying attention have known for some time the current system of US Empire was running out of time and heading for collapse.  Nobody invested in our current system has any idea how to manage that collapse and steer us to a new system that can work for the long term.  So instead, they've just positioned themselves to divert the wealth of America into the pockets of their own allied Oligarchic Elite cronies.  Just as was done to Russia in the early 1990s, Greece much more recently, all the Third World for decades; it's finally coming home to the US.  The biggest prize in the world is the bankruptcy and liquidation of the USA, and now all the people are in place to pull it off.

In reply to by Tolomeo

Ricki13th Wed, 01/24/2018 - 07:16 Permalink

I guess the US is the only country that can manipulate their currency. If anyone else does this they are currency manipulators. Oh the irony.

J J Pettigrew Wed, 01/24/2018 - 07:17 Permalink

"Strong countries have strong currencies"   Steve Forbes

The dollar is weak.....and Fed still has interest rates pegged BELOW the ill measured CPI....

Short rates are 1.5% too low, historically....and why the foot on the accelerator STILL?


Boing_Snap Dode415 Wed, 01/24/2018 - 07:34 Permalink

Trump may just get what he asks for, now what will his polling look like with the gas pump reading $10/gallon?

At any rate the USD is over priced right now and the main thing Trump should be worrying about is a Clinton hitperson getting through.

By the way, where the hell is the ZH article on the leaked "Memo" being scooped by Infowars?

In reply to by Dode415

dirty fingernails Boing_Snap Wed, 01/24/2018 - 10:47 Permalink

Those cheering this aren't considering the ramifications for the millions on fixed incomes or that work for a living. Good luck with your salaried or hourly rate keeping up with runaway inflation. Every industry will feel the pinch and those with long times before payment are gonna take a hit, at least in the short term.

Inflating away the debt is the only option but trying to do it in a year is political suicide and murder. 

In reply to by Boing_Snap

Let it Go Wed, 01/24/2018 - 07:31 Permalink

Lowering the value of the dollar has a slew of bad ramifications. In many ways, it is stupid and dangerous. I suspect the "insiders" are making a great deal of money from this trade.

When looking at the decline or collapse of great empires we find that it is often hard to predict exactly when or how their demise will occur. Many lessons can be learned from the study of past failures and often a sign the end is near is a massive growth in crony capitalism and corruption.

History is full of tales where countries go to war and use propaganda or "fake news" as a way of diverting the eyes of the people away from its failures. The massive growth in inequality and runaway government spending issues should be considered a red flag.

Many people see this as a clear sign and the undeniable confirmation that America's financial and political systems are broken. The article below delves deeper into this subject.

http://How Great Empires Collapse.html

William Dorritt Let it Go Wed, 01/24/2018 - 08:51 Permalink

The current globalist central bank model is designed not only to create the oligarch class, but to reduce everyone else to serfdom, and concentrate all assets into the hand of the few.

The system is designed to drive the price of labor to zero, and for countries to compete based on zero labor cost and devalued currency that restricts consumption of resources which are owned by the couldn't be plainer to see.

In reply to by Let it Go

rejected Wed, 01/24/2018 - 07:40 Permalink

Because of all the new trade deals in currencies other than the dollar plus the petro-yaun,,, dollars are coming home. Billions are on their way. 

Mnuchin and the Emperor are going to preach the BS about the weak dollar creating more jobs acting like the entire debacle is their big plan on MAGA.... 

And most of the 'insouciant' blockhead Americano's will buy it, hook, line and sinker.......... per usual. 

MK ULTRA Alpha rejected Wed, 01/24/2018 - 08:34 Permalink

A central bank or group of CB could be trimming US Treasuries using the dollars to buy their own currency. I don't know the Fed's US Treasuries sales report lag time. It could be quarterly.

China said it would sell US Treasuries if Trump didn't kowtow to the Chinese way of thinking. China could be selling off treasuries and the administration knows it, with public statements of approval citing the benefit for the US export economy and trade imbalance. This development coincides with Commerce Secretary Ross announcing a trade war with China.

In reply to by rejected

MK ULTRA Alpha MK ULTRA Alpha Wed, 01/24/2018 - 08:43 Permalink

Another input, the US bond market is said to be on the edge of crashing. Could this be why Greenspan came from the London Banking District aka "The City" to warn of an imminent bond market crash?

Could the source of the liquidity needed to force the dollar lower be coming from a US bond market crash? It would be a disaster of epic proportion and the anti-Americans on ZH board would have a field day. 


In reply to by MK ULTRA Alpha

FringeImaginigs MK ULTRA Alpha Wed, 01/24/2018 - 10:58 Permalink

So China sells USbonds and gets $USD. The FED sees this move and buys some USbonds to offset the interest pressures that are beyond the level the FED wants (i.e China is implementing the FED policy for the FED). Everybody in the US goes on with life and no change in currency rates or the interest rate structure. BUT China now holds $USD; an asset with no return. What does China do then? Sell USDCNY? Reduce the monetary base in China and its own liquidity? Make things tighter in China? Methinks this ain't such a simple thing for our Chinese partners. And the month after that - what does China do with its surplus? Recycle where?  EUROs??  Rubles??? Zimbabwe????  Venezuela????? 

In reply to by MK ULTRA Alpha

William Dorritt rejected Wed, 01/24/2018 - 08:45 Permalink

Trump is attempting to exchange the minerals mined from the ground for the foreign dollars, an asset for an asset, something other than selling all of our houses and factories to foreigners which was the plan of the previous administrations, which also fits the population replacement plan aka white genocide.

Invest in tangible assets, like guns, bullets, tuna, silver any major appliances you need etc.

CA, IL, CT, NY were betting on President Hilary bailing them out, at some point they may look like the US embassy in Saigon evacuation as they implode.

In reply to by rejected