Here is some good common sense from French President Nicolas Sarkozy as he addressed the US Congress. This snippet comes care of the Financial Times: a "strong dollar policy" means nothing if the US is not willing to put its money where its mouth is at. The Bush administration has been blabbering about a strong dollar policy all this time as the dollar slides into oblivion. Unless the US wants to risk even worse dollar flight, I suggest some action is in order. It's official, then--your humble correspondent, Sarko, and even Larry Kudlow are on the same page about the necessity for American dollar intervention. Wonders never cease...President Nicolas Sarkozy of France on Wednesday urged the US to maintain a strong dollar policy, warning on his first official trip to Washington since being elected six months ago that “monetary disorder risked turning into economic war”.
In a speech in French to a joint session of Congress – the first by a French leader for 11 years – Mr Sarkozy also attacked the “excesses” of Wall Street, saying the land of free enterprise gave too much room for financial speculation...
He took aim at the weakness of the dollar – which hit record lows against the euro this week – saying that the world’s leading exponent of free trade “should be the first to promote fair exchange rates”.
“The yuan is already a problem for everybody. The dollar should not remain simply a problem for others. If we are not careful, monetary disorder risks descending into economic war, of which we would all be victims.”
Pro-Americans should also be the first to criticise “the vagaries and excesses of a financial capitalism that currently leaves too much room for financial speculation”, Mr Sarkozy said. The US should become “strongly engaged in the introduction of necessary [financial market] rules and safeguards,” he added.
