Contradictory Palaver
The recent hullabaloo among President Trump’s top monetary officials about the Administration’s “dollar policy” is just the start of what will likely be the first of many contradictory pronouncements and reversals which will take place in the coming months and years as the world’s reserve currency continues to be compromised. So far, the Greenback has had its worst start since 1987, the year of a major stock market reset.
A modern-day reenactment of the famous “our currency, your problem” play that went over so extremely well in the 1970s… [PT]
The brief firestorm was set off by Treasury Secretary Steven Mnuchin who said in response to the dollar’s recent slide:
“Obviously, a weaker dollar is good for us, it’s good because it has to do with trade and opportunities.”*
Mnuchin backtracked a bit as international financial leaders criticized the apparent shift in policy while Administration officials sought to clarify the Secretary’s remarks. President Trump weighted in on the matter saying:
“Ultimately, I want to see a strong dollar” and added that Mnuchin’s comments were “taken out of context.”
While President Trump sought to allay jittery currency markets that monetary policy had not changed, candidate Trump supported the Federal Reserve’s suppression of interest rates and did not want to see a rising dollar:
“I must be honest, I’m a low interest rate person. If we raise rates and if the dollar starts getting too strong, we’re going to have some very major problems”.**
Of course, the entire uproar about a strong dollar versus weak dollar is a sham. When the dollar (and for that matter all other national currencies) cannot be redeemed for either gold or silver, it is inherently “weak” and ultimately worthless.
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