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Is the prolific dollar doomed?

The U.S. Federal Reserve has increased the money supply over 18% on an annualized basis over the past 12 months. It is not coincidental that the securities market has blossomed over the same period of time. Nor is it coincidental that our trade deficit has increased to the tune of thirty billion dollars per month. Those imports are just too attractive to resist. The world is flooded in dollars. What happens when those dollars come home? Well, according to Rick Ackerman in Gold-Eagle.com, it may be possible for the world to absorb those dollars as fast as we can print them. If this is true, why should we ever raise interest rates? Maybe the dollar is our most valuable export.

Thu, 16 Mar 2000 07:36:36 -0800