Thursday, October 14, 2010

My Letter to the WSJ re: Dollar Slide

Subject: Dollar slide caused by stimulus
Date: Thu, 14 Oct 2010 15:39:02 -0400

Dear Mr. Johnson,
You led your article today about the dollar slide with this statement:

"The dollar fell sharply against a range of currencies Thursday as prospects for Asian economic growth contrasted with the likely need for more stimulus in the U.S."

The U.S. does not need more stimulus. It needs more savings. Stimulus merely consumes capital and puts the U.S. further into debt, contributing to the dollar's slide. Let me recommend that you acquaint yourself with the Austrian school of economics. Go to and search on monetary policy to learn how markets really work. As Ludwig von Mise wrote many decades ago, all exchange rates are set in the market by the relative purchasing power of the respective currencies. The dollar's purchasing power is being eroded with the threat--no, let us say "promise"--of further erosions. This threat to the U.S. economy is as serious as it is unnecessary.

Patrick Barron

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