Bush Policy: Talk a Strong Dollar But Let It Slide
The Bush administration, which officially professes a "strong dollar" policy, is quietly acceding to the dollar's slide on global currency markets.
Indeed, government and Federal Reserve officials and many private economists believe the economic fundamentals point to a lower dollar. But Washington doesn't want to encourage the decline or say anything that might undermine confidence in the dollar and risk a disruptive avalanche of dollar-selling.
The result has been a delicate minuet, in which administration officials speak gingerly if at all about the dollar and instead devote their energy toward another, related issue: China's currency, the yuan. China pegs the yuan to the dollar and the U.S. wants China to let it float, which would almost certainly cause it to rise against the dollar. Without yuan appreciation, U.S. officials fear that currencies in Europe and Japan would bear the brunt of the dollar's depreciation, hurting their exports and restraining their already-weak economies.
European Central Bank President Jean-Claude Trichet this week called the euro's rise "brutal," and Japanese officials have hinted they may resume large-scale intervention to hold the yen's value down.
Since Election Day, the dollar has fallen 1.4% to an all-time low against the euro. Its value against all its trading partners' currencies has declined 1.2%, and it is now down 6% since May. The dollar is down 8% against the euro in the same period and 7% against the yen.
LOSING CURRENCY
Find out what the dollar's weakness means for individuals, companies and the economy, in a plus-or-minus rundown.
The catalyst for its most recent decline was President George W. Bush's re-election last Tuesday. Investors perceive his policies as likely to aggravate the steep U.S. budget deficit.
The dollar's weakness comes against some otherwise favorable news: strong job growth and expectations of higher interest rates. The Fed is expected today to lift its short-term interest-rate target to 2% from 1.75%.
This week, Treasury spokesman Rob Nichols reiterated that the administration supports a strong dollar. Yet in October, the U.S. joined the six other major industrial countries in asserting that "exchange rates should reflect economic fundamentals," though they opposed excessive "volatility."
The fundamentals almost certainly would result in a lower U.S. dollar. Americans don't earn or save enough to finance all their consumption and investment needs plus the federal deficit. Thus, they must borrow from foreigners to finance the shortfall. That has driven the U.S. current-account deficit, the gap on all trade and investment income between the U.S. and the rest of the world, to more than an estimated $600 billion this year, or 5.4% of the gross domestic product. That must be financed by selling stocks, bonds or other IOUs to foreigners. But as foreigners accumulate dollar assets, they may lose their appetite for more, leading to downward pressure on the dollar. The prospect of continued budget deficits, several economists say, has fueled that concern.
U.S. and foreign policy makers agree there are three main ways the current-account deficit could be narrowed. The U.S. could save more, such as by cutting its budget deficit. Foreign countries could grow faster, increasing their appetite for U.S. exports. Or the dollar could fall. That would make U.S. exports cheaper in foreign markets, enabling it to sell more, while making imports costlier, decreasing U.S. consumption of them. Together, that would narrow the trade deficit and thus the current-account deficit. European and U.S. policy makers mostly advocate the first two methods, but also realize that the lower dollar will play a part. A lower dollar, by raising import prices, could raise inflation and thus force the Fed to raise interest rates more, curbing U.S. consumption of domestically produced and imported goods.
The awkward task facing the administration is letting the dollar play its part without appearing to encourage it. Despite its strong-dollar rhetoric, the administration has never intervened in currency markets, and its primary dollar-related activity has been to pressure China to let the yuan rise against the dollar.
The Bush administration's subtle dollar policy is a marked contrast to the approach of other U.S. administrations. The Reagan administration orchestrated concerted global efforts first to push the dollar down, then to brake its fall. The first Bush administration, in its early years, actively bought and sold dollars to try to keep the currency's value within a government-prescribed range. The Clinton administration intervened, albeit much less often, and initially talked the dollar down before Treasury Secretary Robert Rubin initiated the "strong dollar" mantra in 1995.
In the late 1990s a higher dollar made some economic sense because it helped contain inflationary pressures as the U.S. economy boomed. But after 2000, when the boom turned to bust and fears of inflation switched to fears of deflation, the economic rationale for a higher dollar faded. The present Mr. Bush's first Treasury secretary, Paul O'Neill, tried to modify the strong dollar mantra by saying the U.S. wanted a dollar that reflected strong fundamentals. He retreated after those comments triggered a flurry of selling.
Mr. O'Neill's successor, John Snow, is once again intoning the "strong dollar" mantra, but saying and doing nothing to prevent the dollar's slide. Administration officials want the market to set the dollar in response to fundamental factors, and they broadly share the consensus view that the fundamentals entail a decline.
"During the election year, the White House ... wanted particularly to avoid saying or doing anything where they could be blamed for a decline in the dollar and its consequences," says Fred Bergsten, director of the Institute for International Economics. "They were quite pleased with the dollar stability through this year." With the election over now, "the interesting question is whether they will ... indicate their acceptance of this renewed market decline."
That seems unlikely. While officials think a stampede of dollar selling that could force the U.S. to raise interest rates to lure investors back is unlikely, they don't want to encourage the possibility by saying they approve of a drop.
U.S. officials have some sympathy for the concerns recently expressed by European officials on the impact of the rising euro. One reason they want China to let the yuan float is to avoid having Europe and Japan bear all the pain of a shrinking U.S. trade deficit, which could stoke protectionism.
A study by the Paris-based Organization for Economic Cooperation and Development underlined this risk. Presented last spring to a group of member-country policy makers, it found that a 22% decline in the dollar against all other currencies would shrink the current-account deficit by about one-fifth and modestly trim growth in countries that use the euro and in Japan. But to achieve the same deficit reduction with China's currency still fixed would require the dollar to fall much more against the euro and yen, pushing Japan deeper into deflation and requiring much lower interest rates in the euro area to absorb the impact.
Morris Goldstein, an economist at the Institute for International Economics, says that getting any noticeable reduction in the current-account deficit requires a substantial decline in the dollar against Asian currencies. Several Asian countries fix their currencies to the dollar to maintain their competitive position with respect to China. "A few percent here or there won't do a thing," he says. The trade deficit with China alone is headed for an estimated $150 billion this year. He says, "The administration has a lot of look-busy programs with China on the currency front, but none of it is amounting to much."
John Taylor, Treasury undersecretary for international affairs, last week said the administration's level of engagement with China on the exchange rate is "unprecedented." In recent weeks, Chinese officials have suggested that deliberations on exchange-rate moves are reaching fruition. To their usual statements emphasizing exchange-rate "stability" -- long a euphemism for the dollar peg -- central bankers have begun adding the need for flexibility.
In his speech last week, Mr. Taylor cited "three types of economic policies" that will address the current account: boosting U.S. savings via tax incentives for households and a lower budget deficit; pressing for structural reforms to fuel growth in Latin America, Europe and Japan; and pressing for "market-based flexible exchange rates." Those remarks implied that the current account will be addressed through a combination of lower U.S. deficits, higher foreign growth and dollar adjustment.
布什政府在美元政策上口是心非
布什政府虽然口头上仍然表示要坚持“强势美元”政策，但是目睹美元在全球外汇市场的持续跌势，它所采取的却是一种默许的态度。
的确，从政府到联邦储备委员会(Fed)，还有许多独立经济学家，他们都相信，从美国目前的经济基本面看，美元汇率应当下跌。但是，华盛顿方面不想纵容美元的这种跌势，也不愿发表任何可能会削弱人们对美元信心、甚至招致美元出现雪崩式抛盘的言论。
于是，政府官员们便跳起了优雅的小步舞。他们闭口不谈美元问题（即便谈，也是谨小慎微），倒是不遗余力地把人们的目光移到了另一个相关话题上，那便是中国的人民币。中国采取的是将本币与美元挂钩的汇率体制，始终将人民币兑美元汇率控制在一个狭窄的浮动区间，而美国则一再要求中国放松控制，让人民币汇率随市场自由浮动。果真如此的话，人民币兑美元汇率无疑会上涨。美国官员说，若无人民币的升值作为前提，恐怕美元的贬值会使欧元区和日本成为首当其冲的受害者，他们的出口将遭受沉重打击，其本已脆弱的经济将会受到进一步的抑制。
欧洲央行行长特里谢(Jean-Claude Trichet)本周曾发表言论，将欧元的上涨描述成“惨不忍睹”，日本官员也已暗示，他们或许会恢复大规模的汇市干预行动以将日圆汇率维持在较低的水平。
自11月2日大选日以来，美元兑欧元汇率已累计下跌1.4%，达到历史最低水平。其价值相对于主要贸易伙伴国货币也已下跌了1.2%。今年5月以来，美元总体汇率累计下跌了6%，兑欧元和日圆汇率同期分别下跌了8%和7%。
催化美元此轮跌势的是上周二布什赢得连任的消息。投资者们普遍感到，布什所采取的政策可能会使美国现已非常庞大的预算赤字进一步加大。
良好的就业数据以及加息等这些本应是利好的消息并未能改变美元的疲弱之势。Fed周三作出决定，将基准的联邦基金利率从1.75%上调至2.0%。上周五发布的数据则显示，美国10月份非农就业人数增加了33.7万人，远远超出预期，并创下了今年3月以来的最大增幅。
美国财政部发言人尼科尔斯(Rob Nichols)本周曾再次重申，政府支持强势美元政策。但是在10月份的七大工业国财长会议上，美国和其他六国的财政部长们曾联合强调“汇率应反映经济基本面”，尽管他们同时也表示要尽量避免外汇市场的过分“动荡”。
从经济基本面看，几乎可以肯定地说美元汇率应该下跌。美国人挣来的或者说存在银行里的钱根本无法满足他们的消费和投资所需，更别说去填补联邦财政的亏空。所以他们必须从外国人那里借钱来弥补其不足，这便造成了美国经常项目赤字的大幅增加。据估测，美国今年的经常项目赤字将超过6,000亿美元，占国内生产总值(GDP)的5.4%。这必须要靠向外国人出售股票、债券和其他形式的债权来弥补。但随著外国人手中的美国资产越聚越多，他们对美国资产也就逐渐丧失了兴趣，从而使美元遭受到下行的压力。一些经济学家说，美国预算赤字进一步扩大的前景使得美元所遭受到的这种压力日益增大。
美国以及外国的决策者们一致认为，有三条主要途径可以缩小美国的经常项目赤字。一是美国通过诸如削减预算赤字等手段积存更多的储备；二是让外国经济加大增长速度从而使其加大对美国出口商品及服务的需求；再一条途径就是让美元贬值。这样外国市场上的美国商品就会相对便宜，销售量就会增加，同时美国进口外国产品的成本就会增加，从而使国内进口产品消费受到抑制。此消彼长，贸易逆差和经常项目赤字便可减少。欧洲和美国的决策者们大多主张走前两条路，但他们同时也意识到第三条途径也会起到一定的作用。由于美元贬值可以提高进口价格，这样美国国内通货膨胀水平也净随之上升，从而迫使Fed进一步上调利率，抑制国人对国产和进口商品的消费。
如今美国政府所面临的一个非常棘手的问题就是如何让美元贬值却又不至让人认为它在纵容美元贬值。虽然美国政府口头上叫嚷强势美元，但是它从未有过任何干预外汇市场的行为。它所作出的牵涉到外汇市场的最主要行动就是向中国政府施压，要求它放开对人民币汇率的控制。
布什政府微妙的美元政策和历届政府的做法形成了鲜明的对比。里根(Reagan)政府最初曾协同国际力量将美元汇率推低，后来又联手遏制住美元的跌势。老布什政府在上任初年积极买卖美元，将汇率保持在政府希望的区间内。克林顿政府也曾干预汇市，但不那么频繁，一开始是通过口头干预压低美元汇率，到了1995年财政部长鲁宾(Robert Rubin)开始推崇强势美元政策。
90年代末，强势美元政策对美国经济是有利的，因为它有助于在美国经济蓬勃发展的时候遏制通货膨胀压力。但2000年美国经济泡沫破灭后，人们从担心通货膨胀转为担心通货紧缩，强势美元的经济意义就降低了。小布什的第一位财政部长保罗?奥尼尔(Paul O'Neill)曾试图修正强势美元政策，称美国希望美元汇率能反映强劲的基本面。在这些言论引起一系列美元抛售后，他退缩了。
奥尼尔的继任者约翰?斯诺(John Snow)又咏唱起强势美元政策之歌，但面对美元的下跌并未采取任何口头干预或实际行动。官员们希望让市场基于基本面因素来确定美元汇率，他们普遍持一种观点，即从基本面来看下跌是不可避免的。
“每逢大选年，白宫......在一言一行方面都会特别谨慎，它不希望因为美元下跌及其产生的后果而受指责，”国际经济研究所(Institute for International Economics)的伯根斯坦(Fred Bergsten)表示。”一年来美元基本平稳，他们对此非常满意。但随著大选结束，“一个有意思的问题是他们是否会......暗示他们会接受美元汇率重新开始下跌呢？”
这看来不太可能。虽然美国官员们认为不太可能出现抛售美元（这可能迫使美国通过加息来吸引投资者）的情况，他们也不想说什么接受美元下跌的话来鼓励大量抛盘。
美国官员对于欧洲近来所持的针对欧元升值的担忧似乎比较认可。他们希望人民币汇率自由浮动的原因之一就是，想尽量避免让欧洲和日本承受缩小美国贸易赤字要承受的所有痛苦，否则可能引发贸易战。
经济合作与发展组织(Organization for Economic Cooperation and Development)的一项研究就指出了这种风险。今春发布的这份报告认为，如果美元兑其他货币均贬值22%，美国的经常项目赤字就能减少1/5左右，而欧元区国家和日本的经济增幅可能只有小幅放缓。但如果人民币汇率依然钉住美元，那么，美国经常项目赤字要实现同等幅度的下降，就只能要求美元兑欧元和日圆的汇率进一步下跌，如此日本可能陷入更严重的通货紧缩，而欧元区必须实行更低的利率才能消化这个影响。
国际经济研究所的经济学家戈登斯坦(Morris Goldstein)表示，要实现美国经常项目赤字的明显下降，必须要让美元兑亚洲货币的汇率大幅下降。亚洲有好几个国家都实行美元联系汇率制度，以保持相对于中国的竞争力。美国对华贸易赤字今年估计将达到1,500亿美元。戈登斯坦称：“在汇率问题上美国政府与中国有很多计划正在忙碌地进行中，但没有一个很能解决问题。”
美国财政部国际事务副部长泰勒(John Taylor)上周表示，在汇率问题上美国和中国之间政府级别的沟通是史无前例的。近几周来，中国官员称，两国在汇率问题上的讨论已取得了一定成果。中国央行官员已在惯常强调“保持汇率稳定”（即人民币汇率钉住美元的委婉说法）的辞令之外，还谈到了加强汇率灵活度的必要性。
在上周的演讲中，泰勒提到了将用于解决经常项目赤字问题的“三类经济政策”：一是通过个人税收激励措施和降低预算赤字，增加美国的储蓄水平，二是要求拉丁美洲、欧洲和日本实施结构改革、以加速经济增长，三是大力要求推行“基于市场的灵活汇率制度”。这些言论暗示美国经常项目赤字的解决需要通过降低美国赤字、海外经济加速增长以及调整美元汇率来实现。
