THE president of the European Central Bank, Wim Duisenberg, is a buffoon. Do not take my word for it. The head of currency research at Goldman Sachs in London, Jim O’Neil, says the man is “stunningly incompetent”.
The 65-year old Dutchman does not even look like a central banker. With his wild shock of silver hair, he often gives the sartorial impression of having dressed hurriedly in the dark.
The day after CNN showed Israeli gunships strafing Gaza, a reporter from the London Times asked Duisenberg if the ECB would intervene in the foreign exchange market to help stabilise the Euro.
“Oh, I wouldn’t think so,” he said.
The remark sent the Euro skidding to US84c. The Australian dollar, which seems bound hand and foot to the drowning currency, followed it down.
Ruling out official ECB intervention in a chat with a newspaper hack was an unbelievable blunder.
When the ill-starred Euro was born in January, 1999, much was made of the fact that the combined US$250 billion foreign exchange reserves of the
11-nation EU were available to support it.
Since then, the exchange rate has crumpled 27 per cent against the greenback. The only possible savior is enlightened self interest in the US, where the currency crisis is now hitting corporate America.
Expect a softening of the strong dollar policy some time after the November elections.
