Posted on 03/18/2005 9:05:24 AM PST by stan_sipple
The dollar may get another short-lived respite but it is heading inexorably down. The question is how much it takes with it
ALL you need to get into Harvard Law School these days, it seems, is a pair of fuchsia-pink high-heeled shoes. Or so say Buttonwood’s daughters, reliably informed by an early-teen cult film, “Legally Blonde”.
What gives with the greenback? In two of the past three weeks, the dollar took a pasting on reports that various Asian central banks, whose purchases of America’s debt help it to go on borrowing and consuming, were planning to diversify their foreign-exchange reserves away from dollars. Bond yields spiked up (ie, prices fell) and shares looked glum too.
The Faustian deal into which Bretton Woods II has turned—whereby America gets to spend beyond its means and Asia gets to invest in export-led growth, at the cost of recycling much of its earnings in America’s securities markets—turns out to have a shorter horizon than most people reckoned. It could turn sour at any time now. And confirmation of that came from another set of economic data, released on Wednesday: America’s fourth-quarter current-account deficit widened to $187.9 billion, a record.
(Excerpt) Read more at economist.com ...
I dont know much about economics. I do know that anyone who buys another currency to make a buck on it , may do so in the short run , but when the dollar goes under the rest wont be far behind.
ALL you need to get a (PhD in Mathematics, physics or chemistry) these days, it seems, is a pair of fuchsia-pink high-heeled shoes. (sarcasm)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.