Thursday, March 26, 2009

The Dollar Down the Drain

Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan Administration, writes about a problem that few are talking about:

The unaddressed question remains: Is the US dollar’s status as world reserve currency threatened by the debt monetization and multi-year, multi-trillion dollar issuance of new Treasuries?

Losing the dollar's status as the world reserve currency would reduce our ability to import, while inflation and interest rates would go up, making everything much, much worse. Not a pleasant prospect, but a very real danger that Obama's economic advisors don't seem to be worrying too much about.

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