Quote from southamerica:
.
lwlee: How he handles the currency will also be closely watched. In addition, his close tie to China and how he manages it could be historic.
*******
June 8, 2006
SouthAmerica: I put myself on Henry Paulsonâs shoes and I started thinking what would take to anyone to convince me to take the Treasury Secretaryâs job at this time.
Then I realized what must have done the trick.
With the US economy going into a deep recession, the real estate bubble being deflated â with an accelerating number of people going into foreclosure, oil prices keep going up, the US government keep its deficit spending going in high gear like there is no tomorrow, the Iraq civil war keeps getting completely out of control and spilling into other countries in the area, many international investors realize that there are better investment possibilities around the world and they start taking their money from the US dollar and the US economy, other governments realize that it is time to diversify out of the US dollar into euro, gold, and other alternatives, we have at least 3 Katrinas during the hurricane season of 2006 with major destruction and the costs attached to it, and after the November 2006 mid-term elections the US government will be completely paralyzed during the impeachment process of the Bush/Cheney team.
This perfect storm will require an outstanding US Treasury Secretary, and a very good Fed Chairman to ride the storm for the United States when the US dollar finally reach the point of a meltdown starting a major international monetary crisis - a crisis that the world have not seen one like that in decades.
John W. Snow was a buffoon and had very little credibility in the US and never mind around the world. But Henry Paulson and Ben Bernanke it seems to me that they make the A-Team of international finance and they will try to calm the storm when the US dollar start the coming meltdown.
That is the only scenario that makes sense to me for him to accept the job of Treasury Secretary. The only problem is that the United States has never been in such a difficult position before; with 75 percent of the US dollars ever created by the US government flying around the world completely outside of US government influence.
When they start dumping their US dollars in the international markets the shit will really hit the fan. I hope the A-Team will be prepared to play superman.
The Financial Times of London published an article today: âAmericaâs divided global outlookâ â and they mentioned in that article that Henry Paulson has traveled to China about 70 times over the past 15 years, and that he visited 21 countries around the world in the last 12 months. I hope that by now he is fluent in Chinese since he will need that skill in the near future.
.