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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (32877)	2/18/2009 12:12:49 PM
From: DuckTapeSunroof	Respond to of 71588

Re: "Financial panic helps sell US Investments as long as foreigners perceive that we are a safer place to invest." That's what I said. Re: "A Trillion Dollars... should more than sate that demand." Possibly yes, possibly no... If foreign sovereigns are in even WORSE fiscal shape (and Europe and Japan certainly are) by comparison, then the flight to safety in American denominated assets could certainly continue awhile. The point is: currencies' values are RELATIVE to each other (and to any hard assets which are viable alternatives). In the longest-term though... a sovereign currency's relative valuation is determined by both money supply AND by the economic productivity of the underlying backing economy. Without a strong economy, the long-term prospects dwindle....