Sweet!
Posted on 08/01/2006 11:30:04 AM PDT by Republicain
NEW YORK (AFP) - Newly minted US Treasury Secretary Henry Paulson said in his first public comments since assuming office last month that a "strong dollar" is in the United States' best interests.
Paulson picked up the baton right where his predecessor left off in stating his adherence to a strong dollar in a speech at New York's Columbia University.
"I believe that a strong dollar is in our nation's interest and that currency values should be determined in open and competitive markets in response to underlying economic fundamentals," Paulson said, according to a transcript.
The dollar has weakened in recent weeks due to mounting concerns about US economic growth and because some traders believe the Federal Reserve's rate-hiking cycle is near its peak.
Paulson also echoed former treasury secretary John Snow and senior US lawmakers in criticizing the Chinese government's currency regime in an interview with the CNBC business channel shortly before his speech.
Snow had frequently criticized Beijing for its slow pace of currency reform, and US lawmakers regularly claim that China fixes its exchange rate to give it an unfair export edge.
"The Chinese need to show more flexibility with their currency," Paulson told CNBC after a tour of the New York Stock Exchange trading floor.
Paulson said in his speech that the US economy was "transitioning to a more sustainable rate of growth," after gross domestic product (GDP) slowed to a weaker-than-forecast 2.5 percent in the second quarter from a 5.6 percent clip in the first quarter.
He warned that the biggest economic problem facing Washington was spending on federal entitlement programs, but also voiced concern over the recent collapse in the "Doha Round" of world trade talks.
"The biggest economic issue facing our country is the growth in spending in major entitlement programs: Medicare, Medicaid and Social Security," Paulson underlined.
"If left unchecked, these programs would significantly impair our economic flexibility and erode our competitiveness.
"The longer we wait to fix this problem, the more limited will be the options," he cautioned.
Paulson said he will be travelling to Asia early in the autumn and that trade issues will likely top his agenda.
"I am very concerned about the anti-trade rhetoric I hear coming from some quarters here and around the world," he said, adding that the world's citizens would benefit greatly from freer trade.
"I have seen this mindset paralyze the Doha Round of global trade negotiations," he said.
The Doha Round is on life support after a meeting of six key players, including the United States and the European Union, collapsed in late July, largely because of disputes over farm payments.
US trade negotiators are fearful that a Doha Round deal might not be struck before the government's trade promotion authority expires.
The White House's congressional mandate to negotiate such deals expires on July 1, 2007, whereupon the US Congress will regain the right to amend trade agreements, leaving any Doha agreement hostage to US vested interests.
The new treasury chief said that regardless of Doha, he would continue to press for trade liberalization through regional and bilateral accords.
Paulson is no stranger to either Wall Street or money-making. Prior to his nomination by US President George W. Bush, Paulson was chief executive of the Goldman Sachs investment bank, where he earned tens of millions of dollars.
LOL - Why because Dollar is strong now? When it was weak, it was weak Dollar that was good for us.
Don't let Chuck Shumer know that! If he finds out a strong dollar is in the US's interest he will do everything he can to weaken it!
Don't let Chuck Schumer know that! If he finds out a strong dollar is in the US's interest he will do everything he can to weaken it!
FairTax - that's what'll do it!
....just how many are we printing nowadays?
oops...I forgot, that's verboten.
How many should we be printing?
Not enough. My wallet's nearly bare.
Embracing strong dollar as policy isn't going to do much to encourage China, as far as anything more than just a symbolic, minor move away from the Renminbi "linkage" (mot that encouraging weak currency did much in that regard, either). They'll float it in their own time, not ours. Ain't interdependency grand?
mot = not
Including or excluding the dollars being printed by North Korea and the Hizbullah? ;-)
bad cop to Bernanke's good cop.
Sweet!
very true - I was seeing something on FR a few days ago - many americans fear that the value of their homes is no longer rising.
is that our new economic policy, we have to guarantee hyperinflation of real estate, so americans can have more equity to borrow against, to fund their everyday purchases with? its nuts.
Thank you, sir. You're not so rude after all. ;)
I have my weak moments.
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