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November 21, 2004 04:32 PM

The Dollar Is Down, But Should Anyone Care?


Excerpt: Many analysts expect the financing gap to widen and the dollar to decline further. But there are at least three schools of thought on whether a dollar collapse is likely and, if it happens, what it would mean.


WASHINGTON, Nov. 15 - It sounds eerily like the worst economic nightmare for President Bush's second term.

Bogged down in a costly war that shows no sign of ending, the United States faces a gaping budget deficit and ballooning foreign indebtedness. The dollar plunges against other major currencies, while turmoil in the Middle East sends oil prices soaring. The rest of the decade is plagued by rising inflation, increased joblessness and sky-high interest rates.

But the president under fire was Richard M. Nixon - not George W. Bush. The war was in Vietnam, not Iraq. And the dollar crash was in 1973 rather than 2005.

Could it happen again? With the dollar down more than 40 percent against the euro since 2002, and hitting new lows since Mr. Bush's re-election, economists are debating whether America's foreign indebtedness could lead to a collapse in the dollar and a global financial crisis.

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Read all 21 posts in the same category of Economy:

U.S. Quiet on China Trade Tax - Dec 17, 2004
Fed Raises Interest Rates for 5th Time This Year - Dec 17, 2004
OPEC Considers Output Cut to Keep Prices From Falling - Dec 09, 2004
A Plan For U.S. Energy Security? - Dec 08, 2004
Fed Heading For A Pause - Dec 07, 2004
Social Security Reform = New Debt - Dec 06, 2004
Fed Sees Growth, Measured Rate Hikes - Dec 05, 2004
Weak Employment Rport Casts Doubts Over US Economic Strength - Dec 05, 2004
Fed: Inflation Not Setting Off Alarms - Dec 05, 2004
Balancing Act On The Buck - Dec 04, 2004
Job Growth Is Well Below Wall Street Forecasts - Dec 03, 2004
Fed Reports Growth In 11 Of 12 Regions - Dec 02, 2004
Inflation Under Control, Fed Gov. Says - Dec 02, 2004
Global Forecasts for 2005 Growth Are Reduced - Nov 30, 2004
Borrowing For Social Security Plan? - Nov 28, 2004
No Longer Top Dollar? - Nov 26, 2004
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004