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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (150862)	11/3/2004 12:35:30 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 281500

The real problem is that at some point, the falling dollar will have a very diverse effect on foreign debt market for USD. That this has not happened in full force yet is to a good measure because foreigners are afraid that liquidating their positions will push the dollar lower and cost them even more. Absolutely. With over 1/2 of US govt debt held by foreign states - an amount measured in trillions - not to mention other foreign investment, there is a natural break on withdrawal. Finding buyers for all that debt is a problem. Mind you, when there are no buyers, that's when crashes occur. When Bush surprises with ever larger debt offerings to pay for Iraq (and any other foreign adventures), we'll get a first clue as to how bad things are. EUR against USD: trendvue.com That's a trend, and old resistance turned into new support over the past two years.