Re: (OPE-L) Economic 'Armageddon' Predicted -- by Wall Street economist

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Wed Nov 24 2004 - 19:47:30 EST

At 11:21 PM +0000 11/24/04, Paul Cockshott wrote:
>The dollar only has compulsroy circulation in the US
>The world need not be permanently on a dollar standard,
>it is quite possible that the euro might replace it as
>the main reserve currency. Note how much it has appreciated
>against the dollar recently.

Good points.

>The continuing us trade deficit increases the chances of
>this unless the gains to be had in interest can outweigh the
>capital loss of holding dollar assets.

But that chance has been increasing for decades now. Why now have
things gone pass the return point?

>  Hence Roach's remarks
>about the federal reserve having to raise rates.
>Without that the ability of the US govt to fund its current
>account deficit will be in peril.

As I related in my post, the dollar, qua world money, has props that
the euro and the yen do not.


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