TimeForChange Posted September 25, 2003 Report Share Posted September 25, 2003 Reasons why I believe the glorious days of the Greenback (US$) are counted (at least in the long term): 1- US government's debt is ballooning at an unprecedent rate. 2- US population is getting older every day as baby boomers reach retirement age, hence there will be less people to boost the economy and less people holding US dollars (lower demand for the US$ = lower value) 3- Political tensions (general hatred of American foreign policy) continues to reduce the amount of money invested in the USA by foreigners, hence lower demand again. 4- Even if the Federal reserve increases its interest rates to boost the value of the dollar, this will lead to a reduction in economic output, and possibly lead to a recession. And the Fed will probably have to do this if things remain as they are, because it will need to convince foreigners to lend money to the US government by raising rates. 5- There are so many people holding US dollars outside of the USA that as soon as confidence is lost, foreigners will sell their US dollars. I wouldn't be surprised to learn that there is as much US dollars outside of the USA as there is IN the USA. Imagine the impact if all those ''foreigners'' started to sell their US dollars (again, lower demand for the currency = lower value) I might be wrong, of course, but I thought that I should share this knowledge with you guys. I wouldn't want any Armenian to lose significant amounts of money because he or she was not educated financially. Again, I might be wrong. Financial education is a must, even if you don't work in the field. Confidence is like a mirror. As soon as it's broken, there's no way of fixing it. The value of a currency depends a lot on confidence. And confidence is being lost as the US continues to indebt itself foolishly. Quote Link to comment Share on other sites More sharing options...
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