Nicholas Brady, Former U.S. Treasury Secretary

This is a partial transcript from Your World with Neil Cavuto, June 5, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: What to make of what’s going on “over there.” You don’t know where to put your money. Some say it will multiply faster over there, not over here.

The European Central Bank cutting interest rates by half a percentage point today. Now that may not seem like a huge deal to you now, but it could -- could -- put a very big dent in your wallet.

Who better to talk to about all of this than the former Secretary of the Treasury of these fine United States Nick Brady. He served in the Bush and Reagan administrations. Bush senior.

Good to see you.


CAVUTO: I’m liking the goatee here. It’s very avant garde.

The Europeans cut rates. I guess the pressure had been on for them to do that. What do you make of that?

BRADY: Well, they did cut rates, and, counter-intuitively, the Euro went down, and so, you know, it’s a hard -- the people talk about the strong and the weak dollar. I think it’s a total misnomer. This dollar is either lower or higher depending on which way it went, and to talk about a weak or a strong dollar is a mistake, in my view, because it’s totally misleading.

It’s still the largest reserve currency in the world. That makes it strong. I think that Bill Martin probably said the right thing when a former Treasury secretary, I think, asked what should I say about the U.S. dollar, and he said less.

CAVUTO: Yes, but, you know, it’s funny. And I remember trying to get you to say nasty things about the dollar when you were Treasury secretary, but it’s easy for them to put their foot in their mouth, I mean, by making an innocuous comment. It happened to John Snow. It happened to his predecessor Paul O’Neill.

What’s the advice here? I mean does the United States stand by a strong dollar? That must be the consistent policy, but it’s never consistently said.

BRADY: But I think you’ve fallen into the trap, Neil, if I can say. It’s not strong or weak. It’s lower or higher against other currencies, and, if it is the largest reserve currency in the world, if it’s the highest held currency by all central banks, it’s got to be...

CAVUTO: Yes, but it’s not the most happening currency right now.

Now you’re right. It is the largest one in reserves and all that. The euro has been gaining a considerable amount of steam. It’s back to levels when it first started a few years ago.

Many are saying that the dollar’s days as the premier currency maybe a decade from now could be numbered.

What do you think?

BRADY: I don’t think so. I think if the country’s strong, the dollar will be strong, too. It will fluctuate some, and the people that have the most to do with it are the central bankers in the world.

CAVUTO: So if you were to advise John Snow -- for all I know, he’s talked to you and asked for advice -- what do you tell him when he gets into all this trouble with the dollar talk?

BRADY: I would ask him to go back and listen to Bill Martin, which is say less.

CAVUTO: It’s a tough job being Treasury secretary.

BRADY: It really is.

CAVUTO: Now Alan Greenspan -- he’s about 180 years old -- he’s going to stay on at the Fed. Is this going to be like a weekend-at-Bernie’s thing? Is the only way he’s going to leave there is like feet up?

BRADY: I don’t know. I really don’t know. I mean President Bush said he wants him back, and that’s about all I know about it.

CAVUTO: But there must be some secret agita in the Bush family about Greenspan, is there not? I mean many said that he handed the election to Bill Clinton in 1992. He’s not been a fan of this President Bush’s tax cuts. Is it just hands off with him?

BRADY: I don’t think so. I think that the present president feels confidence in the way he’s operated.

CAVUTO: Do you?

BRADY: Well, listen, it’s not my job. It’s the president’s job.

CAVUTO: Yes, I know, but do you think he’s...

BRADY: Yes, I think that, you know, the president’s looked at all the statistics and stuff like that and feel he’s done a good job. He’s spoken. I’m not president. He is.

CAVUTO: All right. Now the fact that he hasn’t rallied around the tax cut, of course, a moot point now, but did that raise concerns to you that maybe another term of Alan Greenspan -- he’s going to raise other objections to what other economically President Bush might want to do?

BRADY: Not really, Neil, because I think the program that the president put forth -- the dividend tax cut -- is a thing that’s responsible for today’s market. I know some of your previous guys didn’t say that...

CAVUTO: Right.

BRADY: ... but anybody that knows anything about math, if the dollar dividend is paid and you get taxed 40 percent on it and you remove that, that means you get more dividends. That’s what this is all about. I think...

CAVUTO: There’s a lot of money coming America’s way.

BRADY: Yes. You bet.

CAVUTO: Good seeing you.

BRADY: Good to see you, Neil.

CAVUTO: Nicholas Brady, former U.S. Treasury secretary and now avant garde.

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