On Wednesday US treasury secretary Steven Mnuchin caused a quite a stir when he stated that a Weak Dollar is Good for Trade.

On Thursday, Mnuchin tried to distance himself from what he had stated.

Now Mnuchin says, "There are benefits and there are costs of where the dollar is, depending on which side of the table you are on."

Let's not beat around the bush. Exporters are on one side of the table, importers the other.

Then and Now

Peter Schiff Summed Up Things Nicely

David Rosenberg

Dr. Arbitration

Which is Better?

ECB president Mario Draghi Not Amused

ECB president Mario Draghi was not amused by this action. The Wall Street Journal reports ECB’s Draghi Criticizes Mnuchin’s Currency Comments.

European Central Bank President Mario Draghi criticized remarks by U.S. Treasury Secretary Steven Mnuchin that a weak dollar benefits U.S. trade, signaling a fresh economic policy rift between European officials and the Trump administration.

Mr. Draghi attributed some of the euro’s recent gains to “the use of language that doesn’t reflect the terms of reference that have been agreed.” He warned at a press conference that such language violated longstanding international agreements designed to prevent currency wars.

The war of words comes amid a surge in the euro currency, which has hit a three-year high against the dollar of $1.25.

Mr. Draghi didn’t identify Mr. Mnuchin by name, but he referenced the Treasury secretary’s remarks in Davos, Switzerland, on Wednesday—that a weak dollar was helpful for trade. Those comments sent the euro higher against the U.S. currency.


“The recent volatility in exchange rates represents a source of uncertainty which requires monitoring with regard to its possible implications for the outlook for price stability,” Mr. Draghi said. A stronger euro makes the ECB’s task of increasing the inflation rate harder because cheaper imported goods weigh on prices. Eurozone inflation has remained below the central bank’s target of just under 2% for five years.

Amazing Hypocrisy Everywhere

Draghi wants a cheap euro, but he blasts Mnuchin for wanting a weak dollar.

Apparently, you can want a weak currency. Actions to achieve a weaker currency, such as competitive QE to infinity, do not matter either.

You just cannot say you want a weak currency.

All in the Definition

US Treasury Secretary John Snow paved the way out of this mess way back in 2003 with his "Newly Defined" Strong Dollar thesis.

Mr. Snow said "strong" refers to such aspects of the dollar as the confidence it inspires in the public and its resistance to counterfeiting.

There you have it. A "Strong" dollar is one that inspires confidence and is hard to counterfeit.

Every county wants that.

The only problem is we need a good definition of "counterfeit".

Does printing money out of thin air coupled with competitive QE constitute counterfeiting?

Mighty Dollar

Recall that The Economist nailed the exact top of the Dollar in December of 2016 with its "Mighty Dollar" cover.

Please click on the link for amusing details and other contrarian covers.

Mike "Mish" Shedlock

Gold Soars, Dollar Sinks After US Treasury Praises Weaker Dollar

The US dollar continued its plunge today after US Treasury Secretary said a weaker dollar was good for trade.

Trump's Ignores Advisors, Doubles Down on Failed Policies, Kudlow Won't Comment

Despite all losses and no wins, Trump refuses to change his tariff policy. He is now a one-man show.

Elizabeth Warren in Bed With Trump: Both Want to Sink the Dollar

Elizabeth Warren and Donald Trump are wrong together on at least one thing: Both want the dollar to collapse.

Puerto Rico Bonds Collapse to 36 Cents on Dollar following Trump Comments

Puerto Rico general obligation bonds fell to 36 cents on the dollar after Trump told Fox News on Tuesday night that Puerto Rico’s debt will have to be wiped out.

Trump Says Dollar is Too Strong Because People Have Confidence in Him: Let’ Fact Check

Today president Trump both praised and blamed himself for the strong dollar.

Currency War Intensifies, Dollar Strengthens: How Long Before Trump Reacts?

The ECB cut rates further into negative territory and the BoJ is expected to do the same. How long before Trump reacts?

Exploring the "Dollar Crash" Thesis in Pictures

People have been predicting a crash in the US dollar for something like forever. Let's investigate another crash thesis.

America First, Dollar Last Says Deutsche Bank

Deutsche Bank says Trump's America First policy puts the dollar last. BMO predicts a flattish dollar.

Trump Threatens to Shut Down All US Dollar Transaction in Turkey

Reports surface of war crimes against the Kurds after Turkey Invaded Syria. Trump threatens sanctions.