Dollar Is World Currency “For A Reason”: Paulson
Filed at 4:25 p.m. ET
WASHINGTON (Reuters) – Treasury Secretary Henry Paulson on Friday defended the dollar’s status as the world’s reserve currency, saying the U.S. economy’s strength, openness and competitiveness would “shine through” the current market turmoil.
“The dollar has been the world’s reserve currency since World War II and it’s been that for a reason. We are the biggest economy in the world, we are as open as any economy to investment, to trade and we’ve had stable economic policies … we’ve had good productivity,” Paulson told reporters at an impromptu news briefing on Friday.
Paulson repeated the administration’s oft-stated mantra that a strong dollar is in U.S. interests and that currency values should be set in a competitive marketplace.
He acknowledged he has heard a lot of questions about the status of the dollar as the world’s preferred reserve currency. While the housing downturn and credit market turbulence are likely to have an impact on the U.S. economy, there is underlying strength, he said.
“I have no doubt that looking out over any reasonable period of time, you’re going to see our strong economic fundamentals in this country shine through,” he said.
Ah, the Fun of Fundamentals. Paulson must be talking about the
- fundamental $9.5 trillion (and growing at $2 billion a day) total national debt, or
- the fundamental fact that we Americans have the lowest savings rate in the developed world
- or the fundamental matter of our individually highest personal debt in that same world
- possibility that fundamental problem that we keep paying back those who lend to us (like China) with a dollar worth less than the one they loaned
- and the inescapable fact that we are a society fundamentally shattered into haves and have-nots, with a shrinking percentage in the middle
- plus the fundamental fact that we are unable to provide health care, education or even a decent job to too many of our citizens
But whatever it is that launched our Secretary of the Treasury into the fantasy of positive economic fundamentals, perhaps the most ludicrous was a repetition of the president’s sad mantra of our ‘commitment to a strong dollar.’
You mean the one that’s dropped by half since George took office?
That had a strong odor about it, Henry.