View Full Version : The Disappearing U.S. Dollar

12-07-2004, 10:50 AM
The Economist magazine (December 2nd issue) offers opinion on the following question about the U.S. dollar:

How long can it remain the world's most important reserve currency?

Here's the link to the article:

I think it's worth a read.

12-08-2004, 05:33 AM
U.S. current account deficit is cited often as the reason for the US peso decline. As far as the trade deficit part, obviously some combination of an increase in exports-decrease in imports is needed. Demand for U.S. goods and services will need to rise and/or U.S. consumption of foreign goods and services will need to abate. A lot of subtle factors behind the numbers. For instance many cite that the U.S. savings rate is too low among consummers but if the price of the homes that they own have risen and thus have built up equity then many view that as a cushion. Anyway a slow down by the U.S. consummer seems to be the bet the bond market is making as far as I can tell. The equity markets seem to be treading water and I really am leary of them at this juncture FWIW. Business investment does seem to be picking up some though witness Intel's recent news.