Monday, October 29, 2007

Treasury Secretary Paulson Provides Comic Relief

From CNBC:

Treasury Secretary Henry Paulson on Monday repeated his mantra that a strong dollar is in the best interests of the US, even as the currency was hitting fresh lows against the euro.

"I believe that a strong dollar is in our nation's interest and also that currency values should be set in a competitive marketplace based upon underlying economic fundamentals," Paulson said in response to a question about the greenback at a US-India CEO forum in Mumbai.

The markets say otherwise.

Look -- if the US wants a "strong dollar policy" they have to act like a strong dollar economy. That means things like exporting more than they import and not issuing mammoth amounts of new debt every year. You just can't say it; you have to act in a way that leads to that result.