Posted by WARREN MOSLER on March 25th, 2009
This is what you get from a president who doesn’t understand the monetary system. The strength of the dollar is off point:
by Julianna Goldman and Kim Chipman
Mar 25 (Bloomberg) — ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œI donÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢t believe that thereÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s a need for a global currency,ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â Obama, 47, said. ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œAs far as confidence in the U.S. economy or the dollar, I would just point out that the dollar is extraordinarily strong right now.ÃƒÂ¢Ã¢â€šÂ¬Ã‚Â
The main difficulty with a world currency is how the budget deficit (the only source of net savings of financial assets for that new currency) in that currency is managed. And with a world of leaders who don’t understand how currencies work, the odds of getting that anywhere near right are very long.