Wednesday, December 8, 2010

Obama cuts deal, offers to extend tax cuts

From Bloomberg:
The dollar rose to near a 10-week high versus the yen as speculation that extended U.S. tax cuts will bolster the economy drove Treasury yields higher and boosted demand for assets denominated in the greenback.

The U.S. currency gained against most of its other major counterparts as 10-year Treasury yields surged to a six-month high after President Barack Obama late Dec. 6 agreed to extend tax reductions for two years. . . .

Obama said he would accept lower tax rates on high earners’ income, dividends, capital gains and multimillion dollar estates for the next two years in exchange for extending federal unemployment insurance. The tax rates, enacted in 2001 and 2003, were set to increase on Dec. 31.
Where are the spending cuts?  Is Obama going to pay for all this with Bernanke's QE?  This only guarantees more price inflation (i.e., dollar devaluation).  Gold and silver may have dipped in recent days but long-range their trend is consistent with everything else denominated in dollars.

No comments:

The State Unmasked

“So things aren't quite adding up the way they used to, huh? Some of your myths are a little shaky these days.” “My myths ? They're...