Bernanke's Rare Intervention Fails to Calm Fears Over Weak Dollar
With the dollar going into steep decline, with the price of gold rising to record levels, with the US’s huge deficit having to be financed through printing money (or ‘quantitative easing’ as they prefer to call it by way of euphemism these days), with Ben Bernanke talking about the dollar “remaining strong” and a “source of global financial stability”, one really has to question the competence, judgment and ability of the head of the Fed – Ben Bernanke! This is, after all, the age of the resurgence of soup kitchens in America, a country in which fifty million Americans are finding it difficult to get adequate nourishment. It is also an age in which bankers continue to pay themselves ginormous bonuses. Surely, this must be the age of ultimate financial mismanagement. Shame on Ben Bernanke! Shame on them all! – © Mark

THE TELEGRAPH: Federal Reserve chairman Ben Bernanke's attempt to shore up support for the US currency failed yesterday as the dollar fell to fresh 15-month lows.

In a rare moment of intervention into the currency markets from America's leading central banker, Mr Bernanke admitted the Fed is watching the dollar "closely" as part of its focus on employment growth and price stability.

Mr Bernanke stressed the dollar will remain "strong" and continue as a "source of global financial stability". >>> James Quinn, US Business Editor | Tuesday, November 17, 2009

Bushonomics!
Image courtesy of the Frankfurter Allgemeine Zeitung
BBC: The euro has hit a fresh high against the dollar, as negative views of the US economic outlook continue to take their toll on the US currency.

A steady sell-off of the dollar meant that one euro was worth $1.4571 at one point, while the pound hit $2.09 for the first time since the 1980s.

A steady stream of bad news coming from the US mortgage sector has sparked fears for the health of the economy.

These fears have prompted investors to sell dollars and buy euros or pounds. Euro climbs to fresh dollar peak (more)

Mark Alexander

Arab States Talk of Revaluation
SYDNEY MORNING HERALD: GULF states, including Saudi Arabia and the United Arab Emirates, could revalue their currencies while maintaining their pegs to the US dollar.

Such a move would probably have the effect of further undermining faith in the flagging greenback and perhaps prompt Asian nations also to consider unhooking their currencies from the dollar.

The Arab states may revalue by an unspecified amount in as soon as a month, a well-placed source - who declined to be identified because the matter was confidential - said on Saturday. No decision had been made on whether to revalue, he said.

The comments came as heads of state of the Organisation of the Petroleum Exporting Countries began a summit meeting in the Saudi capital, Riyadh.

Gulf states are facing record inflation, caused partly by the weakening dollar which has made imports from Europe more expensive. Consumer prices rose a record 4.9 per cent in Saudi Arabia in August while inflation in the UAE increased to a record 9.3 per cent last year. Qatar has the highest inflation in the region, reaching 14.8 per cent.

"It makes sense for them to do it," said Jens Nordvig, senior global markets economist at Goldman Sachs in New York. "Given the emerging inflation pressures, there are very good reasons for them to allow currency appreciation." Arab states talk of revaluation (more) By Matthew Brown and Anchalee Worrachate

Mark Alexander

Dollars No Longer Acceptable as Payment for Entrance Fee to the Taj Mahal
Photo of the Taj Mahal courtesy of the BBC
BBC: Foreign tourists to many of India's most famous landmarks will no longer be able to pay the entrance fee in dollars, the government says.

The ruling is aimed at safeguarding tourism revenues following the recent falls in the dollar.

Until now, foreign tourists to sites such at the Taj Mahal have had the option of paying in dollars or rupees.

The ruling will affect nearly 120 sites of interest run by the Archaeological Survey of India (ASI).

Of these, at least 27 are World Heritage sites, including the Taj Mahal. Dollars no good for the Taj Mahal (more) By Jyotsna Singh

Mark Alexander

More Turbulence on World Markets
TIMESONLINE: Japan leads declines as market 'prices-in a recession' amid strong yen and fears of more subprime damage

Japanese stocks endured a savage pounding today as the US dollar plummeted against the yen and investors' fears heightened at the prospect of more fall-out from the US subprime mortgage crisis.

The Nikkei 225 Stock Average closed down 2.5 per cent to a 15-month low of 15,197.09.

Other Asian markets were also caught in the maelstrom, with the Hang Seng shedding 4.5 per cent of its value to 27,500.96 and Shanghai stocks taking a similar tumble.

Chinese financial stocks were particularly hard-hit as investors blinked at new regulations requiring a sharp increase in reserve requirements. Nikkei plunges to 15-month low as dollar weakens (more) By Leo Lewis

The high oil price may begin to take its toll By Gary Duncan

FT:
Asian stocks sink as exporters suffer By Andrew Wood in Hong Kong and Louise Lucas in Tokyo

BBC:
Europe 'set for slower growth'

SPIEGELONLINE INTERNATIONAL:
The US Economy on the Edge By Peter Coy

Mark Alexander

More Falls in US Stocks
BBC: Stock markets in the US have fallen sharply as the cumulative effect of a weak dollar, soaring oil prices and the credit crisis again eroded confidence.

The benchmark Dow Jones index of leading shares tumbled 360.92 points, or 2.6%, on a day of fresh volatility.

Banking stocks were widely sold as fears over financial problems facing Wall Street showed no signs of abating.

Morgan Stanley said exposure to bad sub-prime related investments had reduced its profits by $2.5bn ($1.2bn).

Sub-prime liabilities on its balance sheet totalled $6bn at the end of last month while the decline in value of these assets had wiped $3.7bn off sales in the past two months.

"It is expected that market conditions will continue to evolve and that the fair value of these exposures will frequently change and could further deteriorate," Morgan Stanley warned in a statement after the stock market had closed. Economic worries knock US markets (more)

Mark Alexander