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Politics : Ask Michael Burke

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To: BGR who wrote (77213)	3/8/2000 9:25:00 AM
From: Freedom Fighter	Read Replies (1) of 132070

BGR, >Ah, currency collapse from lax monetary policy, the other market myth! Why isn't the dollar collapsing in the face of lax monetary policy, care to explain?<< There is a difference between loose money and trying to hyperinflate out of the great depression. I'm far from expert on currencies, but here's my limited understanding. The dollar has remained strong for a variety of reasons. Many smaller countries printed money even faster. Interest rate differentials. ex. I might be willing to take 6% on a currency that is being debased 2% quicker than another that is yielding 2%. The momentum of US equity markets is encouraging more inflows. (not value related) "Cyclical" economic growth differentials. Political pressure on foreigners to support US financing needs in exchange for everything else the US offers the world. The delusional idea that the world can have a "very stable" "fiat" currency system with the dollar as the reserve currency. Wayne

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