November 26, 2004 08:33 AM
No Longer Top Dollar?
Excerpt: There is little U.S. appetite to defend the dollar while the domestic effects of devaluation remain benign. But this insouciance won't last if the decline turns into a rout that threatens runaway inflation, higher interest rates and a recession. Sooner or later, the world's governments will have to come together as they did at the time of the 1985 Plaza Accord to manage the dollar devaluation. But we haven't reached that point yet.
It is a mark of how low the U.S. dollar has fallen both in the markets and in the world's estimation that there is serious talk of the greenback being eclipsed by the euro as the global reserve currency.
The eurozone is barely growing, many of its member states are deeply in debt, and it lacks credible political authority. Yet the Russian government says it is considering switching a proportion of its reserves from dollars to euros in a move that, if widely copied, would cause turmoil in the currency markets.
The Russian announcement reflects a worldwide loss of confidence in America's willingness to tackle its ballooning twin deficits. It follows a warning by Li Ruogu, the deputy governor of the People's Bank of China, that the U.S. should put its own economic house in order and stop blaming others for its structural problems.
"China's custom is that we never blame others for our own problem," Li told the Financial Times. "For the past 26 years, we never put pressure or problems on to the world. The U.S. has the reverse attitude; whenever they have a problem, they blame others."
Demanding that China revalue the yuan, Li said, was not the way to narrow the U.S. trade deficit, now 6 percent of its gross domestic product.
READ FULL STORY ...
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Read all 55 posts in the same category of Economy:
Greenspan Again Backs Plan for Private Accounts -
Mar 02, 2005
Prices Rise Only Slightly, Easing Fears About Inflation - Feb 24, 2005
Oil Prices Rise Amid Concern Over Weather and Supplies - Feb 23, 2005
Oil Climbs Above $51 a Barrel on Concerns About Supplies - Feb 23, 2005
Greenspan Says Entitlement Programs Need Reform - Feb 18, 2005
U.S. Trade Deficit Exceeds a Record $600 Billion - Feb 13, 2005
Long-Term Rates Down Since June - Feb 07, 2005
Trim Deficit? Only if Bush Uses Magic - Feb 07, 2005
China: No Yuan Timetable - Feb 06, 2005
Greenspan Says Trade Gap May Narrow - Feb 06, 2005
Greenspan Sees U.S. Trade Gap Stabilizing and Possibly Falling - Feb 06, 2005
If Yuan Moves, Will U.S. Rates Go Up? - Feb 04, 2005
Greenspan Sees Weak Dollar Easing Current-Account Gap - Feb 04, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Federal Reserve Is Expected to Continue Raising Rates - Jan 31, 2005
Deficits May Be Wearing Thin at the Fed - Jan 25, 2005
U.S. Faces More Tensions Abroad as Dollar Slides - Jan 25, 2005
Oil Price Impact: Worse Than Feared? - Jan 23, 2005
The Effect of Rising Rates - Jan 17, 2005
A Chinese Revaluation May Not Help U.S. - Jan 15, 2005
For Unemployed, Wait for New Work Grows Longer - Jan 09, 2005
Behind the Bouncing Ball of Oil Prices - Jan 09, 2005
Jobs Picture Shows Some Signs of Life - Jan 08, 2005
Faster Rate Increases Coming? - Jan 04, 2005
Fed Minutes: Inflation Subdued, But... - Jan 04, 2005
China Pledges To Work On Yuan Reform - Jan 04, 2005
Fed Intends to Persist With Rate Increases - Jan 04, 2005
U.S. Economy Expected To Perform Well in 2005 - Jan 03, 2005
Women Are Gaining Ground on the Wage Front - Jan 01, 2005
Bush Vows To Maintain 'Strong' Dollar - Dec 26, 2004
Dollar Hits New Low Versus Euro - Dec 23, 2004
Leave No Truffle Behind? - Dec 23, 2004
Social Security Tax Limit May Go Up - Dec 20, 2004
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
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
The Dollar Is Down, But Should Anyone Care? - Nov 21, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004
Prices Rise Only Slightly, Easing Fears About Inflation - Feb 24, 2005
Oil Prices Rise Amid Concern Over Weather and Supplies - Feb 23, 2005
Oil Climbs Above $51 a Barrel on Concerns About Supplies - Feb 23, 2005
Greenspan Says Entitlement Programs Need Reform - Feb 18, 2005
U.S. Trade Deficit Exceeds a Record $600 Billion - Feb 13, 2005
Long-Term Rates Down Since June - Feb 07, 2005
Trim Deficit? Only if Bush Uses Magic - Feb 07, 2005
China: No Yuan Timetable - Feb 06, 2005
Greenspan Says Trade Gap May Narrow - Feb 06, 2005
Greenspan Sees U.S. Trade Gap Stabilizing and Possibly Falling - Feb 06, 2005
If Yuan Moves, Will U.S. Rates Go Up? - Feb 04, 2005
Greenspan Sees Weak Dollar Easing Current-Account Gap - Feb 04, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Economy Slowed in 4th Quarter, U.S. Report Says - Jan 31, 2005
Federal Reserve Is Expected to Continue Raising Rates - Jan 31, 2005
Deficits May Be Wearing Thin at the Fed - Jan 25, 2005
U.S. Faces More Tensions Abroad as Dollar Slides - Jan 25, 2005
Oil Price Impact: Worse Than Feared? - Jan 23, 2005
The Effect of Rising Rates - Jan 17, 2005
A Chinese Revaluation May Not Help U.S. - Jan 15, 2005
For Unemployed, Wait for New Work Grows Longer - Jan 09, 2005
Behind the Bouncing Ball of Oil Prices - Jan 09, 2005
Jobs Picture Shows Some Signs of Life - Jan 08, 2005
Faster Rate Increases Coming? - Jan 04, 2005
Fed Minutes: Inflation Subdued, But... - Jan 04, 2005
China Pledges To Work On Yuan Reform - Jan 04, 2005
Fed Intends to Persist With Rate Increases - Jan 04, 2005
U.S. Economy Expected To Perform Well in 2005 - Jan 03, 2005
Women Are Gaining Ground on the Wage Front - Jan 01, 2005
Bush Vows To Maintain 'Strong' Dollar - Dec 26, 2004
Dollar Hits New Low Versus Euro - Dec 23, 2004
Leave No Truffle Behind? - Dec 23, 2004
Social Security Tax Limit May Go Up - Dec 20, 2004
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
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
The Dollar Is Down, But Should Anyone Care? - Nov 21, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004
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