Chief Engineer Bitching: Damn Euro, Politics, Rubin and Geithner

 If you happen to be way to the LEFT, or way to the RIGHT, please do not read this because you are not going to agree with anything I am saying.

If you happen to not want to hear anything political from me, please do not read this because it is certainly political.

We have paid an average of $1.10 USD per liter for diesel in all the countries we have visited...some more, some less, but it averages $1.10 USD...this is $4.18 USD per US gallon.  We are not complaining about that.

Now we hear that in Turkey diesel will cost 1.51 Euro per liter which is $2.13 USD per liter, or $8.10 per US gallon.  If the Euro was valued where it should be at about par to the USD, diesel would cost $1.51 USD per liter or about $5.74 per US gallon, still on the high side of the range we have paid, but within reason, I think?

I assume you see my point.  The damn Euro is certainly overvalued!

Here is a little History:

You all know Timothy Franz Geithner is an American economist, banker, and civil servant. He is the 75th and current United States Secretary of the Treasury, serving under President Barack Obama. He was previously the president of the Federal Reserve Bank of New York (NY Fed).  He was Under Secretary of the Treasury for International Affairs (1998–2001) under Treasury Secretary Robert Rubin.  Many people believe that Rubin was his mentor and that Geithner was Rubin's protege.  Rubin, you remember was the voodoo economist who, in my opinion, really hurt President Clinton's administration.   Clinton did not ask Rubin to serve a second term.  Upon Rubin's retirement, Clinton called him the "greatest secretary of the Treasury since Alexander Hamilton." On April 18, 2010, in an interview on ABC’s “This Week” program, Clinton said Rubin was wrong in the advice Rubin gave Clinton not to regulate derivatives.  I assume you all know how derivatives hurt all of us and was the root of the financial crash involving AIG and others.

 Rubin was replaced by Clinton In 1999, and affirming his career-long interest in markets, Rubin joined Citigroup as a board member and as a participant "in strategic managerial and operational matters of the Company, but no line responsibilities." The Wall Street Journal called this mix of oversight and management responsibilities "murky."  In an interview with the WSJ, Rubin said: "I think I've been a very constructive part of the Citigoup environment." Separately, the WSJ noted that Citigroup shareholders have suffered losses of more than 70 percent since Rubin joined the firm and that he encouraged changes that led the firm to the brink of collapse. As of June 30, 2008, the notional value of Citigroup’s derivative contracts exceeded a whopping $37 trillion.  Remember, Rubin told Clinton not to worry about derivatives. 

Summary:

I had a hard time understanding why the Euro is so inflated until that I read that the NY Fed, which operates as the agent of the U.S. Treasury in currency operations, confirmed it had supported the Euro. It intervened in currency markets in the fall 2000 when the Euro was on par (equal to) the US dollar.  The NY Fed sold dollars and bought euros to bolster the European currency.  It worked...in a short period the Euro increased in value, and the rest is history.

OK, EU.  Have you returned the favor?

OK, Rubin and Geithner, what are you going to do next?