The New York Times runs a story quoting administration officials and economists who say the weaker dollar is good for exports and has no downside because inflation and interest rates are in fine shape. These are the same people who argue that a lot of inflation is better than a little deflation, a notion which Shostak debunks today.
Meanwhile, European officials are praising the strong Euro as good for Europe. The Economist runs a fine discussion about the tradeoffs of strong vs. weak currencies.
The South Korean central bank has a new idea: it will cut interest rates to spur recovery—just as the same policy fixed up Japan and the US.
Financial Times: “According to the Federal Reserve’s latest figures, outstanding state and local debt rose by 11 per cent to $1,442bn in 2002. The annualised growth rate climbed to 14 per cent by the fourth quarter, increasing at a faster rate than for any other sector, including corporations, households and the federal government.”
