What did Obama Say?
Rumors are circulating that President Obama called the strong dollar a “problem,” while speaking to a G7 summit on Sunday. The White House has come out hard against the rumors, but the idea of a strong-dollar problem was strong enough in investors’ minds to move the currency market Monday morning.
While the dollar has strengthened considerably over the last twelve months, the move is not yet large enough to cause concern. You can see on the chart below that the dollar has gained on other currencies, but hasn’t reached two standard deviations above mean like it has in other strong-dollar periods.
“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Ernest Hemingway
“The best way to destroy the capitalist system is to debauch the currency.” – Vladimir Lenin
“A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation.” – Ross Perot
“He who tampers with the currency robs labor of its bread.” – Daniel Webster
“The euro currency both presupposes and promotes a fiction – that ‘Europe’ has somehow become, against the wishes of most Europeans, a political rather than a merely geographic expression.” – George Will
“But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.” – Martin Feldstein