Treasury Sec Repeats Strong Dollar Policy

radfringe

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Mon Nov-15-04 04:48 AM
Original message

Treasury Sec Repeats Strong Dollar Policy

Treasury Sec Repeats Strong Dollar Policy
Mon Nov 15, 2004 04:06 AM ET
http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6811522

DUBLIN (Reuters) - The United States backs a strong dollar but believes the currency market should determine exchange rates based on fundamentals, U.S. Treasury Secretary John Snow said on Monday during a visit to Ireland.

"I've had a tradition of never commenting on the relative exchange value of the dollar," Snow told journalists traveling with him during a European tour.

---snip---

The dollar fell to a seven-month low versus the yen on Monday as it resumed recent weakness due to concerns about the growing U.S. current account deficit.

---snip----

Snow's comments came amid speculation the Bush administration tacitly approves the dollar's decline, without saying so officially for fear of spurring a faster fall in its value.

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strizi64

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Mon Nov-15-04 05:07 AM
Response to Original message

1. who cares

$$$ :hurts:

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cassiepriam

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Mon Nov-15-04 06:00 AM
Response to Original message

2. Can someone explain this to me?

Why does Bush want a weak dollar?
Why does he want huge deficits?
What are they trying to do?

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hadrons

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Mon Nov-15-04 06:12 AM
Response to Reply #2

3. huge deficits will force them to cut (social) programs later ....

and I believe a weak dollor helps exports (although we really don't produce much in our service economy) and it helps stock prices

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TomClash

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Mon Nov-15-04 06:54 AM
Response to Reply #3

6. we export services

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BeatleBoot

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Mon Nov-15-04 11:59 AM
Response to Reply #6

10. We Outsource Them Too!

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Carolab

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Mon Nov-15-04 06:13 AM
Response to Reply #2

4. I believe that is improves our debt

at least that what I was told--since so much of our debt is held by the Chinese...this forces the value of the yuan up

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muriel_volestrangler

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Mon Nov-15-04 06:30 AM
Response to Reply #4

5. The yuan isn't freely exchangable

the Chinese keep its exchange rate fixed to the dollar (the US wants them to value it higher to the dollar, so that imports from China aren't so cheap in the USA).

The biggest foreign holder of US Treasury debt is actually the Japanese (though the Chinese may have been buying more recently):

Japan $722 billion
China $172 billion
UK $135 billion

http://budget.senate.gov/democratic/charts/2004/packet_foreignhelddebt102004.pdf

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FreeStateDemocrat

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Mon Nov-15-04 08:25 AM
Response to Reply #5

7. Questions concerning the impact on US consumers.

Since we import most all of our consumer products from nails to HDTVs wouldn’t a sinking dollar make these products more expensive to US consumers? Since consumer buying is the engine that drives our economy wouldn’t this be both inflationary and restrain economic growth? I am naïve about economics but it would appear to me that a lower value dollar and a major increase in energy costs would significantly depress our economy? Would wholesalers and retailers absorb these increases in costs to offset a slow down in sales?

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muriel_volestrangler

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Mon Nov-15-04 09:28 AM
Response to Reply #7

9. Yes, imports should become more expensive to consumers

but I don't know any more in this area than you, I'm afraid. The Economy etc. forum might be able to help you (though I suspect it will be a matter of opinion anyway).

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bemildred

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Mon Nov-15-04 08:26 AM
Response to Reply #2

8. Paraphrase from F 9/11:

Edited on Mon Nov-15-04 08:27 AM by bemildred

You cannot maintain a hierarchical social system without
lots of poverty and ignorance at the bottom. Clintoon's
boom was a big threat to the banana republicans in both
parties. That is one reason for the stupid war in Iraq too.
If the government is running big surpluses, it would get hard
to stop national health care, to screw us out of out social
security. War makes a great distraction and Americans are
big suckers for jingo politics.

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