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To: Nagilum
N In 1913, at the height of its empire, Britain was the world's biggest creditor. Within 40 years, after two costly world wars and economic mismanagement, it became a net debtor and the dollar usurped sterling's role. Dislodging an incumbent currency can take years.

But in the internet age, it may only take a few months.

When interest rates and higher prices driven by the currency differentials skyrocket, the show will largely be over.

In the next recession, the Fed will not be able to lower interest rates to keep the economy going, because of the weak dollar. Rates will have to rise, no matter what Greenspan says, just to finance the national debt.

12 posted on 12/07/2004 12:16:17 AM PST by Dec31,1999 (www.protestwarrior.com)
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To: Dec31,1999
In the next recession, the Fed will not be able to lower interest rates to keep the economy going, because of the weak dollar. Rates will have to rise, no matter what Greenspan says, just to finance the national debt.

What a concept, a central bank looking at currency value before making rate decisions. Of course that's what they are supposed to do, but almost never do in actuality. Look at the Euros and Canada. They are raising rates in spite of rising currency values and they can't figure out why their economies are slowing down.

Of course, Greenspan did the same thing in the late 1990's and our economy still grew, but there were exceptional factors then, like Y2K and the birth of the internet market. Still, I bet Greenspan almost popped a vein over it, and we all paid for it when he went nuts with his rate hikes and the Y2K spending stopped, and everybody took their money out of the dollar safe haven.

15 posted on 12/08/2004 1:20:44 AM PST by Moonman62 (Federal Creed: If it moves tax it. If it keeps moving regulate it. If it stops moving subsidize it.)
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