The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.

We are particularly poor at the open economy issues.

Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen for a year or more.

Domestic inflation reflects domestic monetary policy.

We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inflation.

After all, an overvalued dollar gives us the ability to buy foreign goods at lower prices. And the existing volume of exports brings more yen and euros than they would if the dollar were more competitive.

But then in April of 1985 the dollar began a sharp decline. The dollar's trade weighted value fell 23 percent in just 12 months and by a total of 37 percent by the beginning of 1988.

I think that over the last few decades, we have seen better economic outcomes than in the past.

Although economists have studied the sensitivity of import and export volumes to changes in the exchange rate, there is still much uncertainty about just how much the dollar must change to bring about any given reduction in our trade deficit.

First, I think the science of monetary economics has clearly gotten better.

But the primary reason for wanting the dollar to become more competitive in the near future is that we may need an increase in exports this year and in 2007 to sustain the economy's current pace of expansion.

The more competitive value of the dollar turned around the trade deficit.

Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.

A second reason why science cannot replace judgement is the behavior of financial markets.

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar without the adverse effects that followed currency declines in other countries.

The price of imported oil in the US doubled between summer 2003 and summer 2005, reducing consumers' purchasing power by more than 1 per cent of gross domestic product.

The good news is that a competitive dollar in the global market and a strong dollar at home are compatible in both the long run and during the transition to a more competitive dollar.

A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output.

Homeowners who refinanced their mortgages took out cash and reduced their monthly payments at the same time. Much of the cash obtained by refinancing was spent on consumer durables, home improvements and the like.

And finally, no matter how good the science gets, there are problems that inevitably depend on judgement, on art, on a feel for financial markets.

An increase in the relative price of products from the low wage manufacturers in Asia and Latin America will also make those products less attractive to American consumers.

Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.

To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to the rest of the world.

The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.

Unless the trade deficit shrinks, the combination of the trade deficit and the interest and dividend payments to foreigners will grow ever more rapidly.

My theme this evening is that America needs a competitive dollar.

In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth.

So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at the controls.

Inflation is lower and more stable and the real business cycle fluctuations are more modest.

If the Federal Reserve pursues a strong dollar at home while the dollar becomes more competitive in global markets, we can achieve both price stability and a more balanced path of economic growth.

At times, we were forced to go through a history of dependence, unable to determine our own destiny. But today, we are at the threshold of a new turning point.

Schools are successful only insofar as they reduce the dependence of a child's opportunities upon his social origins.

The real message of the Dance opens up the vistas of life to all who have the urge to express beauty with no other instrument than their own bodies, with no apparatus and no dependence on anything other than space.

If the United States is to protect itself from the economic and the political threats created by this excessive dependence, we must reduce our reliance on foreign energy sources and on foreign oil as quickly and as efficiently as possible.

As the cost of gasoline rises and our dependence on foreign oil continues to increase, the effect of sending over $100 billion each year to OPEC nations hurts every American.

The price of indulging yourself in your youth in the things you cannot afford is poverty and dependence in your old age.

It is important that the United States move with all deliberate speed to develop and get into usage alternative fuels that will allow us to end our dependence on foreign oil.

One of my top priorities in Congress is to reduce U.S. dependence on fossil fuels.

If we don't continue to pursue alternative, emissions-free energy sources like nuclear fuel, we are at risk of increasing our dependence on costly natural gas.

The essence of religion consists in the feeling of an absolute dependence.

We need an energy revolution by breaking our dependence on fossil fuels, polluting fuels... I am very, very confident our small state will lead this. We will be noticed by the country and the world.

Well, for starters, we have to do more to create demand for new technologies that can reduce our dependence on foreign oil and environmental degradation.

True happiness is... to enjoy the present, without anxious dependence upon the future.

Ethanol has reduced our nation's dependence on imported energy, created thousands of jobs, reduced air pollution, and increased energy security. And renewable fuels cost less at the pump. It is a growth fuel that fuels opportunities for millions of Americans.

The provisions contained in this plan will ensure that the United States has the infrastructure necessary to meet energy needs through future decades, easing dependence on unpredictable foreign oil markets, and creating thousands of new jobs for American workers.

We need a balanced, long term energy policy to reduce our dependence on foreign oil and preserve the beauty of the land we love.

In spite of our poverty and our economic dependence, we do not have to give in, neither because we are sometimes abandoned nor because of the wish of some nations to impose their economic or political models.

The U.S. now imports over half of its oil supply from the Middle East. This dangerous dependence on foreign energy sources is an issue of national security.

It is probably not love that makes the world go around, but rather those mutually supportive alliances through which partners recognize their dependence on each other for the achievement of shared and private goals.