US Dollar Takes a Hit as Janet Yellen Leaked to be Nominee to Replace Donald Kohn as Federal Reserve VP

The US dollar is suffering some damage this morning, as Donald Kohn is set to retire as Federal Reserve Vice President, and word leaked out last night that easy money Kohn [Sep 12, 2009: Federal Reserve's Kohn: We Plan to Keep Throwing Kerosene on the Fire] is being replaced by easier money Janet Yellen. How easy?  Yellen said if she could make interest rates go below zero, she would.  Let us be thankful the laws of mathematics provide some small form of protection against these people.  Apparently ex NY Fed head Timothy Geithner is at the head of the search committee, and it was a challenge finding a larger dove than Kohn anywhere in these 50 states, but Geithner somehow managed to.  Free money to us all....

I do have a long dollar position via UUP; the dollar still has not broken support but the chart is getting a bit less bullish here with today's news.

p.s. I have a short but very enlightening interview from the "Meredith Whitney of Europe" this morning via CNBC, waiting for the video to become available so I can post it on the site. It goes hand in hand with this appointment and what foreigners believe the US will do in the future... dovetails with the Richard Lehmann thesis we posted yesterday. 

Via Bloomberg:

• Federal Reserve Bank of San Francisco President Janet Yellen is President Barack Obama’s pick for vice chairman of the central bank in Washington, two people with knowledge of the selection process said.
• Yellen, 63, would replace Donald Kohn, a 40-year Fed veteran who resigned last week effective June 23. Yellen, who served as President Bill Clinton’s chief economist in the 1990s, said last month that the U.S. economy “still needs the support of extraordinarily low” interest rates. She would gain a permanent vote on monetary policy, instead of having a vote one year out of every three as a regional Fed chief.
• Gregory Hess, a former Fed economist who’s now faculty dean at Claremont McKenna College in Claremont, California, said Yellen’s views on inflation may be “worrisome” to investors and could result in higher bond yields.