nhboy
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"I continue to be amazed by the way Very Serious People find ways to worry about everything except devastating unemployment. They’ve now spent two years warning about the bond vigilantes about to pull the rug out from under us any day now; as of right now, the 10-year interest rate has fallen to 3.21 percent on weak economic data.
Now there’s suddenly vast alarm about the possibility of a drastic fall in the dollar."
"And why, exactly, should we regard dollar decline as a problem? It helps exports — and export booms are the normal way countries emerge from financial crisis. Dollar declines haven’t brought woe in their wake in the past: neither the huge decline after 1985 nor the sustained decline during the Bush years — both of them dwarfing anything we’ve seen recently — brought catastrophe; in fact, both were associated with OK economic growth and mild inflation.
In some cases, currency declines have caused major balance sheet problems — but that’s because highly leverage players have large debts in foreign currency. US households are plenty indebted — but those debts are in dollars.
So where’s this dollar panic coming from? Well, like so many other things that have suddenly become big issues among the VSPs, it’s yet another reason not to do anything about unemployment. "
"I continue to be amazed by the way Very Serious People find ways to worry about everything except devastating unemployment. They’ve now spent two years warning about the bond vigilantes about to pull the rug out from under us any day now; as of right now, the 10-year interest rate has fallen to 3.21 percent on weak economic data.
Now there’s suddenly vast alarm about the possibility of a drastic fall in the dollar."
"And why, exactly, should we regard dollar decline as a problem? It helps exports — and export booms are the normal way countries emerge from financial crisis. Dollar declines haven’t brought woe in their wake in the past: neither the huge decline after 1985 nor the sustained decline during the Bush years — both of them dwarfing anything we’ve seen recently — brought catastrophe; in fact, both were associated with OK economic growth and mild inflation.
In some cases, currency declines have caused major balance sheet problems — but that’s because highly leverage players have large debts in foreign currency. US households are plenty indebted — but those debts are in dollars.
So where’s this dollar panic coming from? Well, like so many other things that have suddenly become big issues among the VSPs, it’s yet another reason not to do anything about unemployment. "
