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Less than 48 hours after Barack Obama became president, his choice for U.S. Treasury secretary, Timothy Geithner, said a strong dollar is in the United States’ interest.

That phrasing — first used by former Treasury Secretary Robert Rubin more than 14 years ago — lost its weight and credibility when it was over-used by the Bush administration.

The greenback lost about 40 percent of its value versus the euro and more than 15 percent versus the yen between 2000 and 2008. A weaker currency was an important step for the Bush White House in rebalancing a global economy plagued by a U.S. trade deficit and huge Chinese surplus.

“This time around the administration probably means it when it says it backs a strong dollar. They have to be dead serious about it,” said Samarjit Shankar, a director for global strategy at the Bank of New York Mellon, in Boston.

“Trillions worth of U.S. debt is coming soon to the markets. Which foreign central bank or institution will buy this debt if they are not fully convinced the dollar will remain strong?” he added.

The challenge for Obama’s team, analysts said, will be to support the dollar’s value without direct manipulation in the markets, with the economy in recession, interest rates near zero, and a ballooning current account deficit.

Moreover, Washington will have to achieve all that without antagonizing China, the biggest holder of U.S. Treasury debt, the analysts said.

“It will be a real test. One thing is to finance a $450 billion deficit and another is to finance $2 trillion,” said Chris Rupkey, a senior financial economist at Bank of Tokyo-Mitsubishi in New York.

“We are always worried foreigners could ditch the dollar. But they have no incentive to do that,” he added. “The amount they own is so large that they can’t get out of it without impacting their own currencies and economies in the process. And that includes China.”

Geithner, in written response to questions from the Senate Finance Committee on Thursday, said a strong dollar “is in America’s national interest.” For details, see [ID:nN22364222]

But while stressing the need for a stronger dollar Geithner also said the administration would be vigilant against currency manipulation, in particular that stemming from China.

President Obama “believes that China is manipulating its currency” and that he has pledged to use “all the diplomatic avenues open to him to see change in China’s currency practices,” he said in his response.

DOLLAR BULL-CYCLE

“In the case of China, the U.S. may actually favor a weaker dollar,” said Daniel Katzive, a director for global foreign exchange at Credit Suisse Securities in New York. “But despite all the talk, practical policy implications are likely to be minimal.”

The U.S. trade gap with China totaled $246.5 billion year-to-date through November and the country holds $681.9 billion of U.S. Treasury securities.

Katzive said the dollar will stay strong in coming months as the financial crisis deepens in other regions, notably in Britain and the euro zone.

“As long as the euro is weak, the dollar will remain strong,” he said. “Those are the only two reserve currencies in the world and no matter the fundamentals of the U.S. economy, dollar weakness will not be a problem for now.”

Risk aversion and the spread of the credit crisis boosted demand for the greenback and it gained about 20 percent versus the euro since the single currency touched a record above $1.60 last year. The euro was last trading at $1.2960 , rounding up a 7.1 percent drop since the start of the year.

“The dollar’s relative strength is here to stay and may last years, not months or weeks,” said Brian Belski, a U.S. strategist at Merrill Lynch in New York. “It’s not going to be a gangbuster move, but the U.S. will be the first to recover.”

According to Merrill, strong-dollar cycles tend to last an average of 10 years.

Citing a wave of violence and murder in Mexico, the commanding officer of the 1st Marine Expeditionary Force based at Camp Pendleton has made the popular military “R&R” destinations of Tijuana and nearby beaches effectively off-limits for his Marines.

The order by Lt. Gen. Samuel Helland restricts travel into Mexico by the 44,000 members of the unit, many of whom have had multiple tours of duty in Iraq, Afghanistan and other combat zones under their belts — or are there now.

“The National Security Agency had access to all Americans’ communications — faxes, phone calls, and their computer communications,” Tice claimed. “It didn’t matter whether you were in Kansas, in the middle of the country, and you never made foreign communications at all. They monitored all communications.”

Tice further explained that “even for the NSA it’s impossible to literally collect all communications. … What was done was sort of an ability to look at the metadata … and ferret that information to determine what communications would ultimately be collected.”

According to Tice, in addition to this “low-tech, dragnet” approach, the NSA also had the ability to hone in on specific groups, and that was the aspect he himself was involved with. However, even within the NSA there was a cover story meant to prevent people like Tice from realizing what they were doing.

“In one of the operations that I was in, we looked at organizations, just supposedly so that we would not target them,” Tice told Olbermann. “What I was finding out, though, is that the collection on those organizations was 24/7 and 365 days a year — and it made no sense. … I started to investigate that. That’s about the time when they came after me to fire me.”

When Olbermann pressed him for specifics, Tice offered, “An organization that was collected on were US news organizations and reporters and journalists.”

“To what purpose?” Olbermann asked. “I mean, is there a file somewhere full of every email sent by all the reporters at the New York Times? Is there a recording somewhere of every conversation I had with my little nephew in upstate New York?”

Tice did not answer directly, but simply stated, “If it was involved in this specific avenue of collection, it would be everything.” He added, however, that he had no idea what was ultimately done with the information, except that he was sure it “was digitized and put on databases somewhere.”

Tice first began alleging that there were illegal activities going on at both the NSA and the Defense Intelligence Agency in December 2005, several months after being fired by the NSA. He also served at that time as a source for the New York Times story which revealed the existence of the NSA’s wireless wiretapping program.

Over the next several months, however, Tice was frustrated in his attempts to testify before Congress, had his credibility attacked by Bill O’Reilly and Rush Limbaugh, and was subpoenaed by a federal grand jury in an apparent attempt at intimidation.

Exports plummeted 35 percent from a year earlier, the sharpest decline since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The December drop eclipsed a record 26.7 percent decline set the previous month. Economists predicted a 30.3 percent contraction.

Shipments to the U.S., China and Europe fell by the most ever, as the global recession dried up demand for Japanese cars and electronics. Toyota Motor Corp., Sony Corp. and Honda Motor Co. are shedding thousands of workers and closing production lines as profits and sales dwindle.

Local police have found at least 3,000 automobiles — sedans, SUVs, regulars — abandoned outside Dubai International Airport in the last four months. Police say most of the vehicles had keys in the ignition, a clear sign they were left behind by owners in a hurry to take flight.

The global economic crisis has brought Dubai’s economic progress, mirrored by its soaring towers and luxurious resorts, to a stuttering halt. Several people have been laid off in the past months after the realty boom started unraveling.

On the night of December 31, 2008 alone more than 80 vehicles were found at the airport. “Sixty cars were seized on the first day of this year,” director general of Airport Security, Mohammed Bin Thani, told DNA over the phone. On the same day, deputy director of traffic, colonel Saif Mohair Al Mazroui, said they seized 22 cars abandoned at a prohibited area in the airport.

Faced with a cash crunch and a bleak future ahead, there were no goodbyes for the migrants — overwhelmingly South Asians, mostly Indians – just a quiet abandoning of the family car at the airport and other places.

“There are five reasons for owning newspapers, and all begin with a P: profit, propaganda, political influence, prestige and public service. There’s no profit in The Standard, so you’ve got to look at the other things.”

In Moscow, Mr. Lebedev is the major shareholder, along with the former Soviet president Mikhail S. Gorbachev, in Novaya Gazeta, a newspaper that has a reputation for being pro-democracy and independent and whose journalists included Anna Politkovskaya, who was killed in Moscow in October 2006. A freelance journalist for the paper, Anastasia Baburova, was killed on Monday in Moscow.

Mr. Lebedev, a political gadfly, has built a reputation for opposing corruption and seeking stronger democratic institutions, even though, like Prime Minister Vladimir V. Putin, his roots go back to the cold war K.G.B.

In a statement on Wednesday, Mr. Lebedev promised to guarantee The Standard’s editorial independence. “We are strong supporters of a free and independent press and we greatly admire The Evening Standard as an iconic publication with its pedigree of fine journalism and commentary,” the statement said.

The tone towards the banks is becoming more aggressive. Gordon Brown and a phalanx of ministers will say they share the frustration of the public at the irresponsibility of past lending practices, the slowness with which they have revealed their debts and their stubborn refusal in the past few months to release credit.

The tactics, however, betray a nervousness in Labour circles that the public will simply not understand why there is a second tranche of help going to Britain’s bankers, who have already received billions of pounds of loans, guarantees and capital. There is also a worry that Brown’s inadvertent title as saviour of the world might be slipping.

Opinion polls show government popularity falling in the new year. David Cameron may be internationally isolated in his opposition to a fiscal stimulus, but it does not seem to be hurting him. A YouGov poll in the Sunday Times showed Cameron’s Tories rising four points to take a 13-point lead.