Monday, March 17, 2008

Could loss in faith in the US dollar cause a rout?

The Wall Street Journal think it might. The main concern is that unanchored inflationary expectations might cause a collapse in confidence in holding dollars. Quote:
'The Fed needs to restore its monetary credibility, or today's panic could become tomorrow's crash'.

1 comment:

conrad said...

I'm not sure why you're saying could -- its already happening, hence the invention of publically owned equity funds wandering around the world buying companies and resources instead of US bonds. In addition, the US dollar is dropping like a stone at the moment (and hence record oil and gold prices) -- it will be interesting to see where the end is.