Source: http://www.ibdeditorials.com/IBDArticles.aspx?id=323650210144965
By REP. MICHELE BACHMANN | Posted Friday, April 03, 2009 4:20 PM PT
Secretary Treasury Timothy Geithner has been taking missteps since even before assuming his office, when he was exposed as failing to pay taxes. But his biggest misstep may be his flip-flop on the dominance of the dollar.
During a Financial Services hearing last Tuesday, I asked Secretary Geithner and Federal Reserve Chairman Ben Bernanke if they would denounce any efforts to move toward a global currency. Both officials answered unequivocally that they would, and President Obama gave the nation the same assurance.
Less than 24 hours later at a Council on Foreign Relations event, Geithner stated that he was open to China's proposal to replace the U.S. dollar as the world's dominant currency.
Within hours, the value of the dollar plummeted, Geithner quickly retracted his comments and said the dollar would remain the world's dominant currency.
But, despite attempts to clarify his remarks, his unguarded initial response provides a window into this administration's thought process and into its intentions.
I want to know which answer this administration will stand by. The American people deserve to know if their president will protect our currency.
Frankly, I am wary of Geithner's new promise that the U.S. dollar will in fact remain the world's dominant currency. If Geithner honestly just "misspoke," I am additionally concerned with the series of unintended consequences Geithner's comments continue to have on our markets.
So, I have introduced legislation to ensure that our dollar remains in its place of prominence.
If the Obama administration allows the U.S. dollar to be replaced in the global reserve, demand for the dollar will decrease and so will the value of the dollar.
Americans have already suffered a dramatic reduction of wealth. Replacement of the dollar in the global reserve will further reduce the value of the remaining dollars.
We all recognize the difference between the global reserve currency and the actual currency we use here in the U.S. to buy groceries and pay our bills.
However, we also recognize the ties between the two, and when the Treasury secretary appears to be wavering in his support for the American dollar on the global reserve level, it's a bit unnerving to think about the future of the dollar here at home.
Interestingly, a recent Rasmussen poll shows that nearly half of Americans (49%) think that China's proposal is "designed to weaken the economic power of the United States." And 54% of investors hold that view.
Yet the administration seems oblivious to this motive.
Although Title 31, Sec. 5103, of the U.S. Code prohibits foreign currency from being recognized in the U.S., the president has the power to engage foreign governments in treaties, and the president is principally responsible for the interpretations and implementation of those treaties according to the Constitution.
As a result, it takes a constitutional amendment to ensure that neither the president nor the Treasury could issue or agree that the U.S. will adopt an international currency in compliance with a treaty agreement.
If we surrender the dollar as our standard and commingle the value of a dollar with the value of coinage in Zimbabwe, our money supply will be diluted. Economic liberty and political liberty are inextricably entwined. If we lose control of our economy, we will lose our political freedom, and then we are no longer the exceptional nation we have always been.
It is imperative that we ensure the dominance of the dollar, both as the currency of the United States and on the global reserve level. As we have seen all too frequently, the road to socialism is a slippery slope.
Newsweek declared in February that "we are all socialists now." I say: Not so fast. We can preserve free-market capitalism and American economic liberties. But we must take a stand for them.
My resolution would ensure that the U.S. dollar remains the official currency of the United States and represents to the rest of the world a strong show of support that the dollar remains a cornerstone fixture of the global economy.
Bachmann, who represents Minnesota's 6th Congressional District, sits on the House Financial Services Committee.
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