US Dollar Having Serious Problems - 2 articles

[BrklynLiberal]

http://www.nytimes.com/2005/01/25/business/25dollar.html?oref=login&position=&adxnnl=1&pagewanted=all&adxnnlx=1106751809-OO2Xs/Fri8Cdr1zoGyVdnw

U.S. Faces More Tensions Abroad as Dollar Slides
By DAVID E. SANGER

WASHINGTON, Jan. 24 - After a first term in which terrorism and war dominated President Bush's foreign policy agenda, his allies in Europe and Asia suspect that his next confrontation with the world could take on a very different cast: a potential currency crisis, in which a steep plunge in the value of the dollar touches off economic waves around the world.

Already, the tensions over the dollar are becoming a recurring source of friction, a conflict that does not reverberate as loudly as the differences over Iraq but may be as deeply felt. At a meeting in Paris on Monday, the finance ministers of Germany and France complained that Europe had unjustly borne the brunt of the dollar's decline, and called for coordinated action to stop it.

"Europe has until now paid too big a share in this readjustment," Hervé Gaymard, the French finance minister, said. His German counterpart, Hans Eichel, said the United States needed to reduce its deficits, adding "each one has to play its role."

Two months ago, similar sentiments came from China's prime minister, Wen Jiabao, whose nation is at the center of a struggle with Washington over currency policy. He complained about the fall of the dollar, asking, "Shouldn't the relevant authorities be doing something about this?"
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http://news.bbc.co.uk/1/hi/business/4200811.stm

Central banks 'shunning dollar'

Many of the world's central banks are starting to look to the euro to fill their currency reserves instead of the dollar, a survey suggests.
The poll carried out by Central Banking Publications found 39 nations of the 65 surveyed raising their euro holdings, with 29 cutting back on the US dollar.
The dollar's sharp fall in the face of huge deficits could be one cause of the switch, the report says.
The survey was sponsored by the UK's Royal Bank of Scotland.

Losing ground

The last three months of 2004 saw the dollar slip by 7% against the euro, taking it to repeated all-time lows of more than $1.30.
The US is running a budget deficit of close to $500bn a year, funded largely by China and Japan buying large amounts of US government bonds.
Some economists have suggested that the two could ease their purchases, making it more difficult for the US to support its borrowing.
Similarly, the current account - the difference between the amount of money going out of the US and coming in - is deeply in the red, the result largely of large trade deficits.
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[LibertyorDeath]

1. If America attacks Iran that will be it for all the easy credit from these

Countries China just secured a $100 Billion Oil deal with Iran recently.
There's only so much of this shit the World will take from America push comes to shove they'll pull the economic rug out from under the USA.

Sure they'll be hurt by it in the short term but Countries like Japan & China think long term short term pain for long term gain is do able for them.

[indepat]

2. Do you mean it might be someone else teaching someone a lesson,

this time with the US as a pupil. If so, the good news is the American people have ratified everything heretofore done and could reasonably be expected to be done later.