Richnorth, IMO a strong dollar and weak gold is important not only for the U.S. but for all purveyors of paper currency. With the currency turmoil and potential for currency turmoil everywhere else, a decision was made that something had to remain strong, and the dollar is it.
But..here's the rub...while the dollar is important, so is Chase Manhattan, Citicorp, Citibank, BankAmerica etc....As asian currencies plummet, bad loans denominated in dollars effectively rise by the day. A powerful incentive to devalue the dollar.
What they'll try have is strong dollar, but not too strong, some inflation, but not too much... Ultimately though, they'll be forced to take one drastic measure or another, not the "tinkering" (somoene else's term) they would perefer to ensure stability.
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