While some grousing about the falling dollar is expected at the G-8 Sea Island Summit, not much will be done about it.
At stake: pricey foreign TVs vs. cheap exported chickens. Feathers may fly, but answers likely won't.
Larry Peterson
912.652.0367 l larry.peterson@savannahnow.com
What will G-8 do about the dollar this year?
About the same as last.
Which is to say: not very much.
....
"The weak dollar is a bigger issue for the Europeans and the Japanese than for us," said John Howard Brown, associate professor of economics at Georgia Southern University, "because they depend more than we do on exports for their economic well-being."
As long ago as 1999, the Russian newspaper Pravda speculated that the weak dollar might eventually lead to a global economic crash.
At the Evian summit, Germany, France, Italy and Japan were less dramatic in their judgments, but did voice concerns.
At the end of the conference, France, acting as host and chairman, declared there was a consensus favoring "currency stability" - a polite way of worrying out loud about the dollar's slide. Especially worrisome, some Europeans at that summit lamented, were statements by U.S. officials that they could live with a weak dollar.
President Bush responded that he was committed to a strong dollar, but played down his influence over exchange rates.
....
In any case, some analysts - such as Humphreys - say it's best to let market forces take their course. That, they say, will be best for the U.S. economy and the world economy over the long haul.
"The dollar will strengthen," said Doug Bandow, a senior fellow at the Cato Institute, a libertarian-leaning Washington think tank, "to the extent that our economy is perceived to have recovered."
So what is the short-run solution?
"There really isn't one," Humphreys said.
http://www.savannahnow.com/stories/052904/2199080.shtml