The Dollar

This could change everything.  From Bloomberg, Dollar No Longer Haven After Fed Moves Rate Near Zero.

“Prospects ahead appear particularly ominous for the world’s reserve currency once global economic stability starts to build up.”

This could seriously hamper US Government borrowing, especially if foreign entities no are no longer parking reserves in US Government debt.  This would then short circuit the Virtuous Cycle that the US has been enjoying.  See Calculated Risk (Housing and Trade: Virtuous Cycle about to Become Vicious?) for more on that.

Advertisements

One Response to The Dollar

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: