Wednesday, November 24, 2004

The World Is Awash In Dollars

The US government has acted in an incredibly irresponsible manner, is wildly out of control, as the issuer of the world's reserve currency over the past number of decades. With wild abandon it has been creating USD virtually out of thin air so that the US, as a whole, can buy real goods and services from the rest of the world virtually for free. Finally the world is saying "enough". Watch out when the dollar goes below about 80, the last support level, the last low, from 1995. The USD index has never been that low before.

"The dollar’s demise"

(some tidbits from an artical in the statist rag The Economist. Finally, about 4 years after the dollar topped out in the middle of 2001, they are finally getting it.)

"Mr Greenspan’s words were significant because he was tacitly admitting what right-thinking economists the world over have long believed: that the emperor has no clothes."

"The dollar’s status as the world’s reserve currency—its preferred store of value, if you will—is gradually coming to an end."

"It is hard to imagine its hegemony remaining unchallenged when so many will have lost so much. And doubly so given that America has abused the dollar’s reserve-currency role so egregiously that its finances now look more like those of a banana republic than an economic superpower."

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