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To: patron_anejo_por_favor who wrote (114430)	7/25/2001 11:22:16 AM
From: ild	Read Replies (1) \| Respond to of 436258

bondtalk.com 10:33 AM Former Treasury Secretary Robert Rubin argued against ending the strong dollar policy, noting that ending the policy could result in inflation and higher interest rates. Rubin also said the recently approved tax cut was "most unwise" and a "significant diminution of future national savings." Rubin is testifying before the Senate Banking Committee hearing on the current account deficit that will also include former Fed Chairman Paul Volcker, as well as Goldman Sachs Chief Economist Bill Dudley and Morgan Stanley Chief Economist Stephen Roach. Dudley recommends shifting away from the strong dollar policy now "when demand for dollar-denominated assets is still strong and policy is credible, rather than under duress later." But he suggests shifting the emphasis to the economy rather than calling for a weaker dollar. "If the US economy remains more productive than its rivals and the US capital markets remain deeper and more liquid, then the flow of foreign monies to the United States should continue relatively smoothly and easily," according to Dudley. "The current account deficit probably would ultimately shrink, but in an orderly way that would not disrupt the ability of the US economy to grow and the nation to prosper." Roach's prepared remarks note that "an ever-widening current-account deficit implies that foreign investors will ultimately end up "owning" America -- unless, of course, something gives. And it usually does. What should give, in my view, will be the high-flying U.S. dollar."