The NYT told readers that: "currency is usually regarded as a barometer of a country’s economic conditions. The stronger the currency, the thinking goes, the stronger the economy, and visa versa." Is that so? Do people view China's economy as weak? Was the U.S. economy seen as weak in the years 1993-1995 as the recovery took off and the dollar fell in response to Bill Clinton's deficit reduction package? This link between the value of a currency and the strength of the economy is the invention of the NYT. It has no basis in economics. There are many pathetically weak economies with over-valued currencies. This fact is well-known.
--Dean Baker
