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.


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