Fear of Dollar Collapse?

Parent Cafe
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<p>Kuwaitis and Saudis abandon their traditional link to the US dollar and take their money and run. </p>

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<p><a href=“http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/19/bcnsaudi119.xml&CMP=ILC-mostviewedbox[/url]”>http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/19/bcnsaudi119.xml&CMP=ILC-mostviewedbox&lt;/a&gt;&lt;/p&gt;

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<p><a href=“http://www.nytimes.com/2007/09/21/business/worldbusiness/21dollar.html?em&ex=1190606400&en=b39fc984322dbea5&ei=5087 [/url]”>http://www.nytimes.com/2007/09/21/business/worldbusiness/21dollar.html?em&ex=1190606400&en=b39fc984322dbea5&ei=5087 &lt;/a&gt;&lt;/p&gt;

<p>The US is losing control of its own economic destiny. Americans are homers. “America is the greatest”. “America is the strongest economy in the world”.</p>

<p>The joke is we are slowly inflating our currency. We are selling ourselves to foreigners. After they own us, maybe they will do to us what landlords do to tenants they don’t want. “Get out!”</p>

<p>OK. I think I am exaggerating a little. A little. Most of us will be dead before foreigners own us. However, control us. That can happen sooner.</p>

<p>The US cut the Fed Funds rate and long term rates (actually most rates) went up, not down. I didn’t see mortgage rates go down much. Maybe, a few jumbo loans. </p>

<p>Of course, the dollar did get hit. The Fed may not be able to lower interest rates for awhile, even if it wants too. Oops. A loss of control. </p>

<p>You can’t ruin your currency forever. You can’t run large trade deficits forever. Countries that do this end up as third world countries.</p>

<p>Maybe its time America takes the hit for some of its credit policies of the last several years. A recession isn’t the end of the world. Falling home prices are not the end of the world. A few private equity deals going sour…that’s not the end of the world.</p>

<p>Alan Greenspan was all over the airwaves this week hawking his book. I saw quite a bit of him. The best interviewer was Jon Stewart. He asked Greenspan if lowering rates didn’t hurt savers and help debtors who made poor poor decisions.</p>

<p>Greenspan said that was an unintended consequence. Uh huh.</p>

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<p>The dollar was at this level in the spring of 1991.</p>

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<p>America needs a new engine of growth. And other countries are hungrier for the benefits of growth than we are.</p>

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<p>This credit problem isn’t just a US problem. </p>

<p><a href=“http://www.ajc.com/business/content/business/stories/2007/09/21/Britain_0922.html[/url]”>http://www.ajc.com/business/content/business/stories/2007/09/21/Britain_0922.html&lt;/a&gt;&lt;/p&gt;

<p><a href=“http://www.ft.com/cms/s/0/4271e4a0-67db-11dc-8906-0000779fd2ac.html[/url]”>http://www.ft.com/cms/s/0/4271e4a0-67db-11dc-8906-0000779fd2ac.html&lt;/a&gt;&lt;/p&gt;

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<p><a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg;

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<p>?see the USA in your Chevrolet?</p>

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<p>Mattress, anyone?</p>