Cohn on Franc

At the start of 2015 there were three countries in the world that were willing to have a strong currency. The Swiss, the Chinese, and the U.S. The Swiss pulled the rip cord overnight. They just ripped it off and said, ‘We are done. We are done having a strong currency. It is too expensive to defend this.

Thus spake Gary Cohn, the man Trump had picked as Director for his National Economic Council.

That is factually wrong. The Swiss ended their peg to the Euro, not to weaken their currency but the opposite! They effectively admitted that they were done trying to keep it down, artificially! He is saying something diametrically opposite!

On China wanting a strong currency, that too is highly debatable. Well, wrong. They want a weak currency provided someone can guarantee them that America would not retaliate and capital outflows would not turn into a Tsunami. Then, they would happily devalue/depreciate.

Indeed, that is what he said earlier in the interview:

You know, look, so I believe that they’re going to end up devaluing the currency? I do believe they will end up devaluing the currency.

Of course, on this one, he can wriggle out by saying that that that was then and this is now. But, his observation on Swiss franc is plainly wrong.

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