Wednesday, Feb 27, 2008
USA heading for long deep Japan-style recession
Telegraph: Dollar's slump to $1.50 raises European alarm
The dollar tumbled through the $1.50 mark against the euro for the first time today as the US Federal Reserve made clear it will slash interest rates further to head off a severe recession. The Fed's influential vice chairman, Donald Kohn, yesterday played down the inflationary threat in America, arguing instead that "the adverse dynamics of the financial markets and the economy have presented the greater threat to economic welfare in the US."
Posted by uncle chris @ 07:25 AM (397 views) Add Comment
5 Comments
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1. uncle chris said...
2. Orwell said...
Is anyone really surprised at this? The Fed want to prop up profligate spending and therefore hatchet interest rates so the bond markets and other investors take note that the currency is worthless. Isn't this primary school (David Smith) Economics?
3. harold said...
Interesting, as this is against another currency (the euro) which is also rapidly inflating the money supply. Just shows how bad the situation is for paper 'assets'.
4. dbnazz1 said...
To the more learned on this site. will this make the Dollar a prime candidate for carry trade?
5. sold 2 rent 1 said...
dbnazz1,
"To the more learned on this site. will this make the Dollar a prime candidate for carry trade?"
Yes and massively too.
This is why goldforecaster.com is predicting exchange/capital controls very soon.