1

I assume you're referring to the global currency idiocy.  Currently, the Dollar is used as the global standard for commodity pricing and reserves.  Some nations (and the UN) are proposing that this be replaced by a new fiat currency that would be based on a basket of the world's leading currencies.

Geithner said that he liked the idea (which was in direct opposition to a comment that Obama had made saying that the world didn't need a new currency).  If implemented, this would mean that the demand for the dollar would drop and the demand for other currencies in the basket would rise, as the world rebalanced into the new currency.  Thus, the dollar dropped on Geithner's comments.

Needless to say, this is a terrible idea for many reasons, the main one (to my mind) being that it would put partial control of the dollar in the hands of some international agency (most likely the completely incompetent and corrupt UN).  The markets have since gone on to reverse the damage Geithner did, as it's pretty well understood that this is not likely to happen.

Hope that covers it.  Currencies are complicated and are something that, while I understand, am not very good at trading or predicting.

2

Hmmm, after further review, looks like I had a few of the details wrong, although the thrust of the matter is the same.

This article is the best I've seen so far on the details.  Most of the blog commentary I've seen on the topic has been either just snarky (which is fine) or completely ignorant.

3 This idea is popular in countries hostile to US interests because they feel that the use of the dollar as the world reserve currency gives us undue influence in the world.  What they don't understand is that the dollar is the world reserve currency because of it's long term stability and the relative economic stability and power of the US. 

Not an economist but this is a very stupid idea in my opinion and if Geitner goes along with it he is a frickin retard.

4 Thanks very much to both of you - I had the outline of it but I need to get a better grasp of the details.  I still cannot comprehend why Geitner would say such an idiotic thing.  I actually would prefer malice to incompetence in this situation because I want to believe we're only well fucked not well and truly fucked with him in charge at Treasury.

5 I still cannot comprehend why Geitner would say such an idiotic thing.

I think the key word there is Geitner.

6

Geithner's history is filled with utter incompetence.  However, it's been the statist / globalist kind of incompetence that one gets promoted for in the area of public policy.

Also, he's largely a lackey for a variety of vested interests on Wall Street and in the global financial arena.  He held a variety of international-oriented jobs under Clinton, then took a prominent position in the worthless IMF for a few years after Bush took office.

As for China, their main concern is keeping their currency at an artificially low level so that their export-oriented boom can continue.  They'd find this easier to do with a highly political currency basket rather than the dollar alone.

Russia just wants to kick us in the teeth, as they're so fucked up economically that it won't make much of a difference to them either way.

7 As for China, their main concern is keeping their currency at an artificially low level so that their export-oriented boom can continue.

You know what, that's an example of the blatantly obvious whizzing right past me.  I've heard that China is playing around in the markets in an attempt to do precisely that with their currency valuation but I didn't even take that into consideration when thinking about this.

Putin just wants to fuck with us. 

8

Well, liberalism has as it's credo that the more spectacular of a failure you are, the more regarded you become.

 

Example: Jimmy Carter

9 You might not have seen this when Hot Air first mentioned it.  I'll put the link below to a story about an Australian PM's claim that Geithner displayed incompetence in trying to handle a south Asian  financial disaster.
http://www.smh.com.au/opinion/obamas-economic-saviour-savaged-as-keating-lets-rip-20090306-8rk7.html