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. Rakesh
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