The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: Real Man who wrote (5553)	3/27/2008 9:56:15 AM
From: stan_hughes	Read Replies (1) of 71407

Well, at least they seem to talking (fighting?) about it (i.e. the perils of playing leapfrog with the cuts) -- the Europeans seem to recognize that a race to the bottom isn't a very good plan for anybody You know what I find really interesting here -- that the prospect of the USD turning into a funding currency for the carry trade has suddenly spooked the crap out of a lot of people, even some who may previously have thought all one ever need do to stave off a recession is drop your interest rates below inflation and then wait for the expected reactionary borrowing for investment and corresponding pickup in economic activity All of a sudden the light seems to have gone on that maybe any low-rate borrowing in the US will not be reinvested inside the US this time after all, it might instead be used to fund projects somewhere else on the globe where prospective returns look better -- what a bizarre situation -- a nation without any savings being tapped for funding by speculators and transnationals Eventually that strategy would blow up too but it would be mighty ugly for US asset prices in the meantime

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