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Commentary on the present and future of culture, politics, economics, and social values................... "At any given instant/All solids dissolve, no wheels revolve,/And facts have no endurance." W.H. Auden.
Friday, November 19, 2004
Does the Bush Adminsitration want a weak dollar?
The Japan Times reports that Tokyo currency dealers think so. Which explains why they are dumping US dollars. They base their conclusion on remarks by Treasury Secretary John Snow :
They said remarks made by U.S. Treasury Secretary John Snow in London on
Wednesday triggered massive dollar sales. Snow told a seminar that Washington is
committed to a strong dollar, but later said, "The history of efforts to impose
nonmarket valuations on currencies is at best unrewarding and checkered."
Publicly the Bush Administration has stated its desire for a strong dollar in face of the dollar's plunging value in the world markets. Privately, as they face serious trade and fiscal deficits, they think there is an advantage of a weak dollar as an economic benefit in writing off current accounts deficits.
Tokyo traders spotted this, and they joined in pushing the value of the US dollar down further.
The Bush Administration is playing with fire on this issue!