Q: There are critics who say that Fed policy has driven down the value of the dollar and a lower value to the dollar reduces American standard of living.
How do you respond to criticism that essentially Fed policy has reduced American standard of living?
Bernanke: Thanks. First I should start by saying that the Secretary of the Treasury, of course, is the spokesman for US policy on the dollar [dollar? what do we know about the dollar?]…the Federal Reserve believes that a strong and stable dollar is both in American interests and in the interests of the global economy…
There are many factors that cause the dollar to move up and down over short periods of time [so don't look at me--er, us], but over the median term, where policy is aimed, we are doing two things.
First, we are trying to maintain low and stable inflation, by our definition of price stability, by maintaining the purchasing value of the dollar, keeping inflation low—that’s obviously good for the dollar.
The second thing we’re trying to accomplish is to get a stronger economy and to achieve maximum employment. And, again, a strong economy, growing with attracting foreign capital is going to be good for the dollar.
So in our view, if we do what’s needed to pursue our dual mandate of price stability and maximum employment, that will also generate fundamentals that will help the dollar in the medium term.
Q: (inaudible) noticing that it’s been unsuccessful so far.
You’ll have to look to someone who was at the press conference to verify if Mr. Bernanke was actually, physically speaking out of both sides of his mouth. He manages it on paper.