He lied like a Finance Minister on the eve of a devaluation.*
The way these things go, first they try the low cost approach and drop discreet but pointed hints.
When that doesn't work it's time to spank the market. To be effective though, the central banks have to time it at the psychological moment that the speculators are thinking about changing direction of their own volition. Otherwise the Central Banks just waste their firepower to no avail, the currency markets are bigger than they are.
Bloomberg is reporting
"Dollar Puts Morgan, Goldman on `Intervention Watch'":
The dollar's record-breaking slide may trigger the first coordinated effort to shore up the currency in 13 years, according to strategists at Morgan Stanley and Goldman Sachs Group Inc.
The currency yesterday fell below $1.56 a euro for the first time and slumped to the lowest level in 12 years versus the yen. That has prompted complaints from European Central Bank President Jean-Claude Trichet and Japanese Finance Minister Fukushiro Nukaga. U.S. Treasury Secretary Henry Paulson said yesterday he backs a ``strong dollar'' and refused to elaborate when questioned at a press conference in Washington.
The challenge for officials is fighting the $3.2 trillion- a-day currency market while the Federal Reserve reduces interest rates and the U.S. economy falters. With traders increasing bets on a weaker dollar, the Group of Seven nations may be compelled to act, some strategists said.
``We're on an intervention watch,'' Stephen Jen, Morgan Stanley's London-based head of foreign-exchange research, said in a telephone interview. ``While I don't think we have reached the threshold yet, the argument in favor of it is gradually becoming compelling.''>>>MORE
*Here's an online source for the quote (Google returns only three hits**, if you use the quote when accepting your next award, it should be fresh for your audience) worth a read itself.
From the New York Times, Mar. 28, 1989:Market Place; An Expert Shuns Risk Arbitrage
**Book search returns two more, including one by James Altucher, and one from a U.S. Senate hearing on the housing market!:
by United States, Congress, House - Construction industry - 1982 - 569 pages