Commentary ~ May 26, 2003: U.S. Treasury Secretary John
Snow's recent attempt to downplay the dramatic drop in the value
of the American dollar is a lame attempt to whitewash Bush's inept
handling of the economy. Despite the fact that the euro has gained
27 percent against the dollar over the past 12 months, and the dollar
has lost 9.5 percent of its value against the Japanese yen, Snow
claims that the greenback's slide is a "fairly modest realignment
in currencies."
The dollar has even slid to a 5 1/2-year low against the Canadian
dollar, finally giving Canadians a reason to like George Bush.
Since the beginning of 2003, the Canadian dollar has risen more
than 15 percent in value against the greenback, with two-thirds
of that increase coming since early March.
According to Bloomberg
News, 21 of 30 traders, analysts and investors now recommended
buying the 12-nation European currency instead of the American dollar.
In trying to further justify the lackluster performance of the
U.S. currency since the Bush coup d'etat, Snow et al claim
the falling dollar against the euro will benefit the U.S. economy
and narrow its current account deficit by making U.S. products cheaper
to buy overseas. While this could be a silver lining to the dark
clouds overhead, we seriously doubt it was part of the Bush plan.
In fact, it is doubtful there even is a Bush plan.
Despite the dubious science behind the claim that the falling dollar
will stimulate the U.S. economy, several White House Propaganda
Channels, such as MSNBC, helped the Bush Team blow
their trumpets.
Even if the cheap buck drives up exports, it will also make imports
to the U.S. more expensive, causing inflation to the U.S. economy,
thereby undermining any economic recovery that Bush may be hoping
for before the next election when he seeks to legitimize his illegitimate
government.
In addition, a continued decline in the American currency could
wreak havoc in financial markets and the U.S. economy because it
could easily curb foreigners' interest in dollar-denominated investments.
If the dollar becomes too weak, the Federal Reserve may have to
raise interest rates in the United States to attract foreign capital.
That could end up being the straw that breaks the camel's back.
Read more about Bush and the U.S.
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