♠ Posted by Emmanuel in Casino Capitalism at 4/22/2008 06:23:00 PMThe following is an open letter to Henry Paulson:
Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Paulson,
Us dollar holders would like to know just what you mean by a "strong dollar" policy. You have continuously reiterated this line of your Bush administration predecessors that the United States backs such a policy. On the day you assumed office on 10 July 2006, the Euro/USD exchange rate stood at $1.28. Today, 22 April 2008, the Euro now trades above $1.60. In whatever terms you prefer--trade-weighed, real effective exchange rate (REER), et cetera--it seems the dollar is on the back foot. Please clarify in what sense a 20% nominal depreciation demonstrates strength.
Although some may consider the "strong dollar" claim disingenuous, we will give you the benefit of the doubt. If you can suggest an alternative definition of "strong" for us--perhaps the dollar is strongly in demand in highly progressive economies which show the way forward for the US economy like Venezuela or Zimbabwe--your input would be much appreciated. I highly suspect that our inferior vocabulary skills are behind this misinterpretation issue as our dollar savings shrink into further oblivion--except in terms of Venezuelan bolivars or Zimbabwean dollars.
Faithfully yours in depreciation,
The IPE Zone