Ray Lopez

The Dollar's Decline: Quite a Spectacle

Excellent article! Points out the fact that only a few percent of Americans hold passports and care about foreign exchange--how true. The other countries have to sell in the US since the US is a monopsony (monopoly buyer). For this reason a French economist (Rueff?) once called the dollar deficit a "deficit without tears". What is true for Japan is true for America: less than 15% of the GNP depends on foreign trade, so the US can spend beyond its means as long as the dollar is accepted by all countries "as good as gold". When the dollar is no longer esteemed, watch out, since the total dollars in circulation I believe are greater outside the US than inside. But that's 10-20 years down the road IMO.