NSS CHRONICLES: Snow seeks to shift focus away from dollar slump, US deficits (AD, no list given but it's a good candidate along rest of internuts- PMs can't believe the gains on GOOG, AMZN, EBAY and RIMM)
AFP: 11/15/2004
DUBLIN (AFP) - With protests growing around the world about US deficits and a weak dollar, US Treasury Secretary John Snow has made it clear that's not what he wants to talk about during his European tour.
Snow, who was in Dublin at the start of a four-nation EU visit, reverted to his well-worn phrases Monday about Washington's "strong dollar" policy and the need for open markets to set exchange rates. "We support a strong dollar," Snow said in response to questioning from reporters about the recent dollar movements. "A strong dollar is in America's interest." Snow also brushed aside questions about intervention to stem the dollar's slide, saying "currency values are best set in open and competitive exchange markets."
(Strategy: Blame the Europeans !!) Aides say Snow is not preparing to be lectured about US deficits, but instead will tell the Europeans they need to fix their "growth deficit", which Washington blames for the global imbalances that have led to trade deficits and, in turn, a drop in the dollar to record lows against the euro. The stop in Ireland is symbolic, US Treasury aides say, highlighting how lower taxes and decreased regulation can spur business investment and economic growth -- a model Snow sees as an example for other economies in Europe.
Snow, in meetings with business leaders and Irish officials, was praising the steps taken by Ireland to boost growth. (Tax free helps....LOL) Higher growth, especially in Europe, is seen as the remedy to the massive US current account deficit that has been weighing on the dollar, say US officials.
Moreover, Snow does not want to give credence to the notion of a crisis in currency markets that could end up being self-fulfilling, say analysts.
US officials, while steering clear of any steps to talk down the dollar that could lead to a devastating loss of confidence, are believed to be privately content with a lower dollar that helps US exports be more competitive, boosting the American economy.
But the real answer, say US officials, is to bring up economic growth in many economies around the world to avoid a situation where the United States is the main global growth engine.
Such a move could help increase US exports and pare the big US current account deficit -- the broadest measure of trade and investment -- that troubles financial markets and officials.
Snow, in an interview with CNBC television Friday, said he intends to press the Europeans on growth during his visit.
"They have to get at the structural barriers that they put in place that restrain the natural potential of their economy. They've got to embrace the spirit of enterprise," he said.
"They've got to look at lower tax rates, they've got to look at more open labor markets, they've got to look at reforming their pension systems. There is is an awful lot on the table that they could do. It takes political leadership."
Europeans have been critical of US policies leading to a massive current account deficit which widened to a record 166.2 billion dollars in the second quarter.
The gap has weighed on the dollar and economists fear that if foreign governments and investors turn away from the US, it could cause a precipitous drop in the greenback that sends shock waves through the global economy.
The euro rose above 1.30 dollars last week for the first time since it began trading on foreign exchange markets in January 1999.
On Monday the single European currency climbed to 1.2999 dollars in early European trading, before easing back to 1.2962 dollars, with Snow's comments seen as having little impact on the market.
HBOS analyst Mark Miller said in London that Snow was doing no more than "paying lip service to the US administrations support for a stronger dollar".
Market Data 
Markets 
AI
