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Latest Happenings:


May 1, 2011 Islamada, Pakistan:

Osama Bin Laden confirmed to be killed by US forces. It was confirmed this evening around 9:15 PM CST. Apparently he was killed a week ago in Islamabad, Pakistan in an estate within the city. Intel indicates that a unmanned drone inconjunction with US special forces killed Bin Laden and others in the enusing firefight. DNA evidence confirmed that Osama Bin Laden's body was recovered from the site where the attacked took place. The man hunt for Bin Laden has ended after 3515 days.
 

October 25, 2010 Lexington, Kentucky
 “Lauren Valle Left Wing Extremist Poster Child”. No doubt there are extremist on both sides, but this story is being painted as if an innocent bystander is being stomped on by right wing activist. Since the mainstream media has failed to really tell the whole story, let’s dig deeper to find out who the woman is that was wrestled to the ground by activists who attended the Jack Conway / Rand Paul debate Monday evening. Her name is Lauren Valle (W/F, DOB 5/4/87, 415 Shorewood Drive East, Falmouth, MA). Valle has a checkered past having been arrested previously as an unruly activist in Port Fourchon Louisiana for vandalism and trespassing. http://www.lpso.net/pressrelease.asp?id=927

 

 

 

She is presently on the moveon.org payroll (contractor). Valle was wearing a blond wig in an attempt to disguise herself from the Rand Paul campaign / supporters. What would be ones purpose to be in disguise, at the debate? It is quite obvious a resident from Massachusetts that travels to Lexington, Kentucky is not there to support either candidate, but to stir up trouble. She found trouble and now she is being paraded around as a poster child for the left media to show how the right wing extremists are apparently behaving like SEIU union thugs and Black Panthers. Well the Paul supporters were warned that there could be trouble prior to the event and when Valle made an attempt to lunge at Paul it was a normal reaction by the crowd to bring her down and subdue her. Tim Profitt one of the Paul supporters may have over reacted, but in the heat of the moment when a known opposing activist is attempting to lunge at a candidate, it may have been warranted. Why doesn’t the mainstream media ask Valle why she was there is first place why was she wearing a disguise why did moveon.org ask her to be at the debates. There are always two sides to the story.

Richard Jonec

 

 

January 19, 2010 Massachusetts

In a stunning loss for Democrats and a dramatic victory for the GOP, Republican Scott Brown wins the late Ted Kennedy's Senate seat in Massachusetts. The people are taking action by voting out the ones that do not represent the masses. This is a major turning point in American politics. 2010 is the year we as Americans will service notice to the ones that fail heed our voice.

August 28th at the State Capitol  - Sacramento  / Tea Party Against Regulatory and Taxation Tyranny

Productive People of
California to tell Government to "Get off of our backs!"

Special for the California Political News and Views by Mark Meckler
 
For decades, those is
Sacramento and Washington D.C. have managed to almost continually increase taxation and regulation of the productive people of California.  Year by year, in creeping, sometimes barely noticeable fashion, politicians and bureaucrats have slowly tightened a regulatory and fiscal noose around the collective throat of California business.  Now ranked at the top of the national taxation charts, and consistently ranked as one of the worst places in the U.S. to do business, smart folks have taken heed and are leaving the once "golden" state in a never-ending, one-way caravan of both financial and intellectual capitol.  You may not yet know the answer to the question, "Who is John Galt?" but the odds are increasing daily that you won't meet him in California.  He's surely left, along with thousands of other productive citizens.
 
The tea parties across the nation are a response to a general disgust with and distrust of government as usual (or worse than usual, depending on your point of view).  On
February 27, 2009, approximately 150 people held a tea party protest against an out of control government in front of the state capitol in Sacramento, and over 30,000 joined them nationwide.  On April 15, at least 15,000 people did the same in Sacramento
, and over 1.2 million joined them at over 850 tea parties around the nation.  Each time, the media and the skeptics asked, What next?"  Implicit in the question was the belief, and some would say a desire that the tea partiers would go away.  But that has not happened.
 
Every day the tea party movement grows in this country, with thousands more deciding that they are disillusioned enough with our government, at the local, state and federal levels to step up and do something.  Many of them join the Tea Party Patriots (
www.teapartypatriots.org), who provide training, resources and guidance to people interested in participating in the movement at any level.  The group is non-partisan, non-profit, and exists to promote the ideals of fiscal responsibility, constitutionally limited governments and free markets.  The organization specifically excludes discussion of the social issues and partisan politics that have been used by politicians to divide us for decades.  Instead, it focuses on fiscal responsibility, constitutionally limited government and free markets. 
 
Individual Tea Party Patriots around the state were heavily involved in educating their friends and neighbors against the deceit pushed by the politicians behind Proposition 1A, and on May 19, celebrated a huge victory for taxpayers, by defeating it in a two to one rout.  The initiative, which would have saddled
California taxpayers with an additional $16 billion in taxes, was proposed by dishonest politicians who tried to disguise the largest proposed tax increase in state history as a "budget cap."  Working with experienced tax fighting organizations like the Howard Jarvis Taxpayers Association, the Patriots provided much needed grassroots ground troops in the fight against ever growing government. 
 
Since May 19th, tea partiers around the state and the nation have been successfully educating citizens about the health care debacle promoted by the majority in Congress and the Administration, and also about the absurdity of the proposed federal global warming / cap and trade legislation.  As the Tea Party Patriots have grown, so has awareness about the issues by ordinary citizens, and all polls are dramatically trending away from the proposals now pending in congress.   If the federal government wants to know the future trajectory for its proposed plans on "global warming," it need only look at the dying state of California, which already suffers under the most economically destructive environmental laws in the nation; a true example of government eco-tyranny in practice. 
 
Since May, tea partiers around the state have also reached out to other groups, and have discovered people across the state suffering under a broad range of government regulatory and taxation schemes.  Many businesses and their representative trade organizations have been unaware of, or uninterested in each other's battles with the state and federal government.  Working separately, they have fought ineffectively against the ever-increasing regulation and taxation that have crushed the spine of
California's business community.   The federal government has shut off water to central valley farmers to save the "delta smelt."  Tens of thousands face unemployment, and family farms are lost to a congressionally created dust bowl.  The timber industry faces increasing regulations under the California Global Warming Solutions Act (AB32), and many loggers will find hundreds of thousands of dollars of equipment now made "illegal" as of December 31, 2009
.  In an industry already decimated by government eco-tyranny, many family owned businesses will simply be unable to continue, and more jobs will be lost.  In sectors from manufacturing to construction, transportation to ranching, and oil and gas to dairy farming, businesses are being regulated and taxed out of business by politicians and bureaucrats who are blind to the economic devastation left in their wake.
 
California businesses have diverse interests and are regulated by dozens of agencies, under multiple regulatory schemes, authorized by a plethora of laws.  However, the majority of California businesses suffer from the same disease; death by a thousand regulatory cuts.  From every direction, and at every turn, productive businesses in California face regulations, insurmountable bureaucracies, high taxes, and ever expanding legislation.  Taken as a whole, it's virtually impossible for the average business to survive in California.  Many have closed up shop, unable to cope with the high corporate taxes, and tyrannical regulatory schemes.  Many have moved to other states, like Texas
, which currently enjoys a $9 billion budget surplus, and a thriving business economy. 
 
Realizing that these
California businesses, though perceiving themselves in separate battles, were really all fighting the same thing, we have set out to unite them.  Small and medium sized businesses create 90% of all new jobs in California.  These are precisely the businesses shutting their doors or leaving the state.  It is our intent to unite all of these diverse business owners and industry associations to fight as one against government over-regulation, eco-tyranny and over-taxation.  On August 28, 2009, from noon to 5 p.m. we are inviting all of these people to the state capitol in a show of unity and force never before seen in California
.  Tens of thousands are expected, with convoys and busses coming in from across the state and descending on the capitol building.  Radio talk show hosts from around the state will be broadcasting live from the event, and though planning is still in the works, nationally known speakers and entertainers have expressed interest in attending. 
 
California has lost over 750,000 jobs in the last year, and in June alone we lost over 60,000 jobs.  Yet the legislature continues to press on in its mad desire to legislate, regulate and tax virtually everything, driving businesses into bankruptcy or out of state.  Meanwhile, politicians play games by passing "budgets" which everyone knows are not sustainable for more than a few months.  Politicians utilize smoke filled back room deals and secret, "Big 5" negotiations which result in accounting gimmicks, such as pushing the last state payroll day from one year to another to "save" money on this year's budget.  Enough is enough.  It is time for the common sense wisdom of the productive people of California
to prevail.
 
Clearly, many of the politicians in
Sacramento have not gotten the message that voters intended to send on May 19th.  We, the productive people of California are sick and tired of the madness coming out of Sacramento.  It is time for the legislature to create a new, "business friendly" environment in this state.  It's not enough to say "no new taxes."  It's time to relieve the burden on business and let the people of this great state get back to work, before they all leave.  California didn't become a world class economy because of its government and their ability to regulate and collect taxes.  California
became an incredible engine of productivity because of its citizens.  It's time the government set its own citizens free by withdrawing burdensome legislation (AB32 for starters), lowering taxes and creating a stable, business friendly environment.  It's time for government to let the citizens of this great state get back to what they do best; creating wealth, jobs and prosperity. 
 
On August 28th, the productive people of
California
will send that message, loud and clear, to their government, by descending on the state capitol in the tens of thousands.  Stay tuned to see if government is too tone deaf to hear. 
 
Mark Meckler
(Mark Meckler is one the four National Coordinators for the Tea Party Patriots and also serves as the Sacramento Organizer and California Co-Coordinator for the organization.)
mark@teapartypatriots.org



June26, 2009
On June 26th, the House of Representatives passed one of the largest tax increases in US history, the Waxman-Markey Climate Change act HR2454, by a margin of just 7 votes.

See the Wall Street Journal Article: http://online.wsj.com/article/SB124588837560750781.html

May 31, 2009
Detroit Michigan, GM files for Chapter 11 protection.  Approximately $19 Billion of tax payer dollars will be lost.  US governmnet wil provide an additonal $30 Billion for restructuring. As part of the negotiations the US government will have a 60% stake in the company.

 

 

May 19, 2009

The Tea Party Coalitions' opposition to the special election Propositions 1A, 1B, 1C, and 1D were successfully voted down. Your votes were heard. The first step to taking our check book back was a success. The Governor is now forced to implement budget cuts. Thank you to all to who voted.

Apri 29, 2009
Detroit Michigan, Chrysler LLC is expected to file for Chapter 11 protection. President Obama is planning to announce Chrysler's  bankruptcy Thursday April 30, 2009.  Approximately $4.5 Billion of tax payer dollars will be lost if Chrysler files.  As part of the negotiations, the U.S. Treasury raised its offer to Chrysler’s lenders to $2.25 billion in cash to forgive $6.9 billion in secured debt, two other people familiar with the matter said. The previous offer had been for $2 billion in cash. See the full story below.


April 15, 2009

The Temecula Tea Party Event was represented by nearly 2000. Follow the link to see some of the day’s events. Local Tea Party Coalition members came out in force to voice their opposition to Proposition 1A which is to be voted on in the California special election on May 19, 2009.

http://www.youtube.com/watch?v=5Xqp1V5R3Ns

More about Prop 1A.
http://www.youtube.com/watch?v=31Fet4VtzpA


April 8, 2009
Jonec Tea Party Coalition founder is interviewed by John and Ken of KFI 640 AM radio "More Stimulating Talk" His interview starts at 33 min 45 sec.  Jonec voices his opinion about Governor Schwartznegger's speech supporting Prop 1A at the 2009  Inland Empire Economic Summit.
http://www.kfi640.com/cc-common/mediaplayer/player.html?mps=kfijohnken.php&mid=http://a1135.g.akamai.net/f/1135/18227/1h/cchannel.download.akamai.com/18227/podcast/LOSANGELES-CA/KFI-AM/JK0408093P.mp3?CPROG=PCAST?CCOMRRMID&CPROG=RICHMEDIA&MARKET=LOSANGELES-CA&NG_FORMAT=talk&NG_ID=kfi640am&OR_NEWSFORMAT=&OWNER=&SERVER_NAME=www.kfiam640.com&SITE_ID=616&STATION_ID=KFI-AM&TRACK=

Cincinnati Ohio Tea Party is represented by approximately 4000 on Sunday 3/15/09 according to the Kentucky Post.
http://www.kypost.com/content/wcposhared/story/Thousands-Support-Cincinnati-Tea-Party/jEByecYgr0ikWevbeXm5wQ.cspx

 

 

 

 

 

 

 

The Orlando Florida Tea Party contingent had over 4000 show up in Down town on Saturday 3/21/09.
http://pereiraville.com/scribble/?p=7104

The Orlando Sentinel covers this weekends event.
http://www.orlandosentinel.com/news/local/orl-locteaparty21032209mar22,0,426670.story

                                                   " The Spendo Meter"


The Gross National Debt

Do you want to see where the stimulus money can potentially be ear marked.
http://www.stimuluswatch.org/

So who is getting all the money and how much has been spent. $2.7 Trillion and counting. Follow the URL and find out.
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/index.html

            On June 26th, the House of Representatives passed one of the largest tax increases in US history, the Waxman-Markey Climate Change act, by a margin of just two votes. South Bay Representative Jane Harman’s vote was half of that margin, and she deserves to be held accountable for her share.  This bill will levy an annual cost as high as $1,870 per family by 2020[1] either through direct taxation or higher energy costs, while producing negligible reductions in greenhouse gas emissions.

            At the core of this Climate Change bill are so-called cap-and-trade laws which would put a series of increasingly restrictive limits on industrial emissions of greenhouse gases in the coming decades. The government would sell a fixed number of permits to companies such as utilities and oil companies allowing them to emit greenhouse gases-- companies exceeding their permitted emissions would be hit with large fines. The intent is to reduce US greenhouse gas emissions by 17 percent by 2020 and 80 percent by 2050.

Proponents of this legislation are as full of hot air as the greenhouse gases they are trying to limit. They are confusing the intent of the proposed law with the incentives it creates. The intent is to burden industrial users with pollution’s cost, by forcing them to reduce emissions or be hit at their bottom line. This overlooks that the companies hardest hit primarily produce products like gasoline, electricity and food which we can’t live without. The incentive they are creating is for producers to simply pass the costs on to consumers, who will have no choice, but to grin and bear it.

Another incentive is for corporations to move carbon heavy industries overseas to “carbon tax havens” such as China or Mexico, exporting the jobs along with them. American demand will continue unabated, but will be met by industries shipped overseas to avoid the tax. In the current economic climate, can we really afford further job losses?

Proponents of these measures will state that “something” must be done to retard global warming. I do not disagree, but they should look at the big picture, rather than trying to rush through a quarter-baked policy that’s politically expedient. According to the US Department of Energy, China has exceeded us in emissions since 2006, and combined with Brazil, Russia and India, these countries now produce 50% more carbon dioxide than the US, at an accelerating pace.[2] For every ton of carbon the US does not emit, industrial polluters will emit three in a BRIC country, to meet US demand. Worse, this work will be done by a job that could have stayed in the US. US reductions through punitive measures like cap and trade will be a drop in the bucket compared to growth in emissions in these developing economies.

Alternatives exist to cap and trade that can reduce US emissions and at the same time, dependence on foreign oil. In the past 30 years, Brazil has converted its auto fleet to run on sugar-cane based ethanol, which unlike the corn-based ethanol made in the US, is actually carbon neutral and offsets vehicle emissions. Ethanol has now replaced 50% of their gasoline consumption, with no government subsidies. US consumers are unable to take advantage of sugar-cane based ethanol due to high tariffs in place to protect US sugar farmers and huge subsidies in place for corn ethanol producers. Sugar-cane ethanol is more cost effective than gasoline as long as oil remains above 30 dollars per barrel.[3] Since sugar cane ethanol is cheaper than gasoline, a similar transformation in the United States would be carried out by free market forces if we simply eliminate obsolete tariffs and tax measures that protect a small, but vocal, minority of US farmers and would go a long way towards cutting our greenhouse gas emissions.

This bill brings nothing but grief for American families, with dubious effects on global warming. If Rep. Harman was really the “fiscally responsible” Democrat that she claims she is, she would take the time to examine all the alternatives and facts before voting for this bill. While Rep. Harman will be insulated from the economic costs of this bill thanks to her huge personal fortune, working class Americans in her district will feel the effects of her vote for years to come.

 

Nathan Mintz is the Chairman of the South Bay Tea Party, a non-partisan organization that advocates common sense in economic policy and limited government. You can learn more about their efforts by contacting him at: nathan.m.mintz@gmail.com 



[1] “The Cap and Tax Fiction” Wall Street Journal 06/26/2009 available here: http://online.wsj.com/article/SB124588837560750781.html

[2] DOE, EIA official statistics. Available here: http://www.eia.doe.gov/pub/international/iealf/tableh1co2.xls

To get these numbers, I added Brazil, Russia, India and China’s CO2 emissions for years 1999 through 2009 and compared them against US emissions.

[3] Ethanol fuel in Brazil: http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil Statistics are from the comparison table.

DETROIT -- Chrysler LLC and Fiat S.p.A. are prepared to complete an alliance by Thursday that would be taken into bankruptcy court as a key element of the U.S. automaker's restructuring plan if needed, a person with direct knowledge of the situation said.

President Obama is planning to announce that Chrysler will file for Chapter 11 bankruptcy protection as it wraps up the Fiat deal, Bloomberg News reported. The Wall Street Journal said two versions of Obama's speech are being readied -- one if Chrysler files for protection and another if it avoids bankruptcy. The Washington Post said Chrysler CEO Bob Nardelli would be replaced by Fiat management under a bankruptcy plan being developed.

Obama, in an address to the nation Wednesday night, said he's more hopeful than he had been that "a viable Chysler " can emerge from the crisis. He said it's not yet clear if Chrysler will have to file for bankruptcy -- and if it does "it will be real quick."

He spoke on the eve of Chrysler's government-imposed deadline to forge the deal with Fiat and secure concessions from the UAW and creditors in order to qualify for additional U.S. rescue loans.

The UAW late Wednesday ratified cost-cutting contract terms that would also cut in half the remaining cash portion of Chrysler's $10.6-billion obligation to a trust fund for retiree health care.

If some Chrysler lenders reject an offer from U.S. officials to take $2 billion in cash in exchange for debt, a Fiat-Chrysler deal would be part of the plan submitted to a bankruptcy judge, according to the source who spoke on condition of anonymity about the merger discussions.

A separate government source familiar with the negotiations said Chrysler will survive and avoid liquidation, but whether it will file for bankruptcy hasn't been determined. Chrysler spokesman Todd Goyer and a spokesman for Chrysler majority owner Cerberus Capital Management LP declined to comment.

Creditors

The U.S. Treasury Department has reached an agreement with Chrysler's largest creditors to cancel $6.9 billion of debt in exchange for $2 billion in cash. But the deal still must get unanimous approval from all the debt holders.

A person knowledgeable about the talks said Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital are the holdouts. Oppenheimer declined to comment while spokespersons for the other two lenders didn't return phone calls.

The Michigan congressional delegation and the administration are in contact with the holdouts in an attempt to get them to reach a deal, this person said.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., estimated the likelihood of a Chrysler bankruptcy at 50-50.

"The higher the threat of death is, the more likely it can be worked out," he said. "The wild card is whether any of the remaining bond holders have taken out insurance policies that pay them in full if Chrysler fails. If anybody benefits more from a bankruptcy than from no bankruptcy, then you have a problem stopping it."

Cole said beyond the remaining bondholders, the Obama administration must still negotiate a deal with the dealers it insists Chrysler eliminate to avoid a bankruptcy. That is virtually impossible to do quickly with a large body of dealers, but if Obama's team can find a settlement pattern before the deadline -- cash or perhaps equity in Chrysler -- details could be worked out later, Cole said.

Douglas Bernstein, a partner at law firm Plunkett Cooney in Bloomfield Hills, Mich., said the automaker can't shed a large block of dealers without court protection.

"Chrysler still needs a bankruptcy filing," Bernstein said. Even if Chrysler reaches agreement with all its bondholders, it has to rely on a bankruptcy judge to cancel dealer franchises or face the prospect of years of dealer lawsuits in multiple states, he said.

Obama's update

In St. Louis earlier today, Obama said he was hoping a tie-up would be worked out but said he was not sure "if the deal is going to get done."

"We're hoping we can get a merger where the taxpayers will put in some money to sweeten the deal but ultimately the goal is -- we get out the business of building cars and Chrysler goes and starts creating the cars that consumers want," Obama said in a town-hall style meeting near St. Louis.

"We don't know yet whether the deal is going to get done," Obama said. "I will tell you that the workers at Chrysler have made enormous sacrifices -- enormous sacrifices -- to try to keep the company going.

"One of the key questions now is, are the bond holders, the lenders, the money people, are they willing to make sacrifices, as well? We don't know yet, so there's still a series of negotiations that are taking place."

Earlier, White House spokesman Robert Gibbs told reporters: "Hurdles still remain, but we remain optimistic and hopeful that something in the next many hours will get done that will provide a pathway for Chrysler's viability without continued government assistance." The automaker is surviving on $4 billion in U.S. loans.

Chrysler's Nardelli, in a letter to employees today, said the automaker continues to make progress in its efforts to complete the proposed alliance.

"If approved, it would clear a significant hurdle on our continuing journey toward long-term success, but the proposed agreement still needs to be approved by all of the secured lenders," Nardelli said in the memo.

Neil Roland , Jesse Snyder and Reuters contributed to this report.

 
The Obama Administration “asked” GM’s CEO Rick Wagoner to step down. Will GM ultimately be a quasi Government run entity? How do we expect our Government to run private institutions such as car companies and banks if they can’t seem to balance their own budgets? See the story below.

March 30, 2009 - 12:01 am ET

WASHINGTON (Reuters) -- General Motors and Chrysler LLC will each be given capital and time to accelerate their attempts to restructure and survive, according to a government aid plan set for release today.

GM also confirmed earlier reports that Rick Wagoner has stepped down at the request of the administration. He will be succeeded as CEO by COO Fritz Henderson. Board member Kent Kresa, chairman emeritus of Northrop Grumman Corp., will be interim non-executive chairman of the GM board.

A government official, who asked not to be identified because the plan would not be announced by President Barack Obama until today, said GM will be given 60 days to determine the best path forward.

Chrysler will be given 30 days to complete a proposed alliance with Italy's Fiat SpA. If the deal is successful, the government could extend up to $6 billion in new assistance.

 

 

 

The official did not say how much capital each company would receive over the next several weeks, and did not indicate what long-term financing GM might receive if it shows that a turnaround plan can be successful.

Chrysler has said it needs additional funding as soon as Tuesday to avoid a cash crisis. GM has previously said it needs more than $2 billion for April.

GM has asked for more than $16 billion in new government loans, while Chrysler wants $5 billion to ride out the weakest U.S. market for new cars in almost 30 years. Ford, which is also struggling, is not seeking federal help.

Wagoner was the second car executive to lose his job on Sunday. The board of France's PSA Peugeot Citroen fired CEO Christian Streiff and replaced him with Philippe Varin, who will take up the position on June 1. Peugeot last month posted a $460 million net loss and said it expected to stay in the red until 2010.

"Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date," said U.S. Rep. Thaddeus McCotter, a Michigan Republican and member of the House Financial Services Committee.

Said Rebecca Lindland, director of IHS Global Insight: "We had feared the Obama administration may force some of the executives out. But we don't really see how this would make GM the better, stronger company that Obama wants it to be."

John Casesa, a managing partner at New York-based consulting firm Casesa Shapiro Group said: "GM lost its footing in the late 1970s and the board didn't seem to notice for another 20 years. Rick made a lot of decisions, but they came too late,"

GM and Chrysler have run through most of the initial rescue money and are at risk of bankruptcy without immediate help.

The government has said it does not want to push GM or Chrysler into bankruptcy, although some analysts believe that is the only way to truly restructure the companies.

Wagoner had been outspoken in his opposition to a Chapter 11 reorganization, saying it would drive away consumers and probably lead to GM's liquidation.

But neither automaker has finished the cost-cutting overhaul dictated by the terms of their December bailout launched by the Bush administration that set a March 31 deadline for determining whether the companies can be saved.

 

 

 

 

 

Dollar Declines Most Since 1985 Plaza Accord on Fed Bond Buying

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By Ye Xie

March 21 (Bloomberg) -- The dollar dropped the most against the currencies of six major U.S. trading partners since the Plaza Accord almost a quarter-century ago as the Federal Reserve’s plan to purchase Treasuries spurred speculation that it’s debasing the greenback.

“What it introduces is the problem of the currency to the extent that the Fed is buying what isn’t desired by foreign holders,” said Bill Gross, co-chief investment officer of Pacific Investment Management Co., in an interview on Bloomberg Television on March 19. “The Fed can keep interest rates where they want to keep them, at least for a 6- to 12- to 18-month period of time, but it will have consequences down the road.”

The U.S. currency weakened beyond $1.37 per euro this week for the first time since January as the central bank’s decision to increase its balance sheet by $1.15 trillion lowered yields, making American assets less attractive. The Norwegian krone and the New Zealand dollar rallied as the Fed’s move spurred advances in commodities.

The dollar depreciated 4.8 percent to $1.3582 per euro yesterday, from $1.2928 on March 13. The U.S. currency touched $1.3738 on March 19, the weakest level since Jan. 9. The dollar also fell 2.1 percent to 95.94 yen from 97.95. The euro increased for a fifth week versus the yen, gaining 2.9 percent to 130.29 after touching 130.49 yesterday, the highest level since Dec. 18.

The ICE’s trade-weighted Dollar Index dropped 4.1 percent this week to 83.84, the biggest decrease since the week in September 1985 when the U.S., U.K., France, Japan and West Germany agreed at New York’s Plaza Hotel to coordinate the devaluation of the dollar against the yen and deutsche mark.

Fed’s Announcement

The U.S. currency tumbled 3.4 percent versus the euro on March 18, the biggest drop since the 16-nation currency’s 1999 debut, when the Fed unexpectedly announced at the end of its two-day policy meeting that it will buy up to $300 billion of Treasuries and increase its purchase of agency mortgage-backed securities, a policy known as quantitative easing.

“The dollar’s decline this week has more or less priced in the policy response,” said David Woo, global head of foreign- exchange strategy at Barclays Capital in London, in an interview on Bloomberg Television. “Over the next three months, I don’t see much downside for the dollar to the extent other central banks will be under pressure to follow the Fed’s lead and essentially go down the route of quantitative easing.”

Stocks advanced this week, while crude oil had a fifth week of gains, the longest winning streak in 11 months. The Standard & Poor’s 500 Index increased 1.6 percent. Crude oil rose above $50 a barrel.

Norway’s Krone

Norway’s krone was the best performer versus the dollar among the major currencies, increasing 7 percent this week to 6.377, the biggest advance since 1973. The Australian dollar gained 4.4 percent to 68.69 U.S. cents, extending its advance in March to 7.5 percent. Crude oil is Norway’s largest export, while raw materials account for 60 percent of Australia’s overseas sales.

Colombia’s peso increased 3.6 percent to 2,359 per dollar, while the South Korean won appreciated 5 percent to 1,412.25 on demand for emerging-market assets.

“The rise in risk appetite may be sustained in the near term, which would make the dollar weaker still,” a team led by Vincent Chaigneau, head of fixed-income and currency strategy at Societe Generale SA in London, wrote in a research note yesterday. “We remain skeptical about the durability of that run, but still believe that the newly found dollar weakness could last.”

Treasury Yield

The yield on the benchmark 10-year Treasury note dropped the most since January 1962 on the day of the Fed’s announcement and fell 0.26 percentage point this week in its biggest decrease since December. At 2.63 percent, the yield was 0.34 percentage point lower than that of the comparable-maturity German bund. The gap widened 0.16 percentage point from a week earlier, making U.S. assets less attractive.

“We would by no means assume that the reaction to the Fed’s quantitative-easing announcement has run its course,” Credit Suisse Group AG currency strategists led by London-based Ray Farris wrote in a research note yesterday. “Fed purchases of Treasuries are likely to be quite problematic for the U.S. dollar, particularly given large foreign holdings of Treasuries and the loss of yield support for the dollar that Fed purchases have caused.”

Foreigners hold about half of the marketable Treasury debts that are outstanding. China, the biggest foreign holder, with $740 billion, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said at a press briefing in Beijing two weeks ago.

Goldman Sachs Group Inc. raised on March 19 the target on its bet against the dollar to $1.40 per euro, and Citigroup Inc. recommended on the same day that its clients buy the euro versus the dollar.

The yen fell to a three-month low against the euro as the Bank of Japan bought government notes and made subordinated loans to banks to spur the economy. The stretch of weekly declines was the longest since July.

To contact the reporter on this story: Ye Xie in New York at yxie6@bloomberg.net

Last Updated: March 21, 2009 08:00 EDT

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