Travis

U.S. Dollar Paradigm Shift Underway

This article is great. Finally we get an author that values a long term outlook with a logical and rational understanding of the TRUE VALUE OF THE AMERICAN DOLLAR AND ECONOMY! We are still the number one consumer in the world with the largest GDP... the world needs us to buy their exported goods just as much as we need them to fund our debt -if not more.

"So at risk of sounding Pollyannish, it is encouraging to note that big central banks in Asia and Europe are not bailing on the U.S. economy. According to a report released by the Department of the Treasury on Monday, foreign central banks bought a net $36.1 billion in Treasury bonds and notes in January. That was a record." from - money.cnn.com/2008/03/...

While foreign governments may be investing in euros and other currencies, they are still buying dollars, because they know they are backed by the U.S.

And the world should be (and will be) applauding Bernanke and the Fed for the innovative and aggressive ways they have employed to get our economy and credit markets working again.

Anything in the economy is cyclical, just like the dollar. Our current recessionary forces will start to bring price inflation back down. As with the "irrational exuberance" of a bubble market, we see the same doomsdayers come out during tough times.

cheapybob: What is the US dollar supposed to be worth? And are you seriously comparing a loaf of bread at 1 cent in 1900 to current prices? Of course we are going to have inflation, but we have also seen an explosion in GDP, productivity, and wealth (in real terms) since 1900. Come on now.