In light of my column yesterday arguing that the dollar desperately needs strengthening (an argument also made repeatedly and forcefully by many experts wiser than I), it is my duty to inform you that we are all doomed. Apparently, our federal reserve chairman is an utter nincompoop. Unless the Wall Street Journal mischaracterized a paraphrase of some testimony he gave Congress yesterday, his solution for today’s current economic problems is…drum roll please…to be grateful that the dollar is weak!!! In not just any story, but the lead story on page one of the WSJ, the big news is “Dollar’s Dive Deepens as Oil Soars,” and the article provides numerous indices that “the dollar is falling with new speed.” Yet Bernanke “point[ed] to the weak dollar as a rare bright spot helping exports, jobs and the trade deficit.”Â !!!!!
A bright spot, he says!!!! This is madness.
And even the few supposed advantages of a weak dollar cause even more problems involve even more price hikes. Witness this sentence from the same WSJ story: “A cheap dollar also fuels upward pressure on the prices of imports, a factor that complicates the Federal Reserve’s task of fighting inflation.” So Bernanke makes the dollar weak, which makes his own job harder. Brilliant. As the news story also notes, the administration is also at fault: “The Treasury Department, while officially supporting a strong dollar, has not protested its mostly gradual decline.” Of course, now the decline is no longer gradual; it’s just short of a free-fall.
And nobody anywhere in power seems determined to arrest that fall.
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