Prior to the financial crisis, our impression was always that the Treasury Secretary’s only real job was to make comments every once in a while about wanting a strong dollar, and that was that. Now the job is a little bit more sophisticated, what with engineering bailouts and all.
Anyway, we must be getting far-enough away from the crisis days, that Tim Geithner can revert back to the jawboning part of his job.
Reuters: The dollar’s decline has been a source of concern in the export-heavy region, especially since top exporter China keeps its currency’s value closely managed against the U.S. dollar and so felt less impact on prices for its exports than other Asian nations that let their currencies float freely.
“I believe deeply that it’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar,” Geithner said in a meeting with Japanese reporters at the U.S. embassy.
In reality that means absolutely nothing. For one thing, he’ll never have control over the strength of the dollar, so long as the Congress controls the purse strings, and the Fed is in position to monetise all the spending.
And besides, we’re sure we could find some instance of Geithner pushing for a more free-floating Yuan, which would be the 180-degree opposite of pushing for a stronger dollar. All talk, and maybe a few momentary thrills from Forex traders overnight.