November 20, 2004

Greenspan, International Investors Question The Dollar's Continued Viability

The New York Times is reporting today that Fed Chairman Alan Greenspan, along with his Japanese and European equivalents and various international investors, are questioning the continued viability of the U.S. Dollar. It seems that the fact that the nation has accumulated $2.6 trillion, 23% of our GNP, in debt to foreign investors is scaring some of them away. The European Union is concerned that the drop in the value of the dollar is leading to deflation of the Euro, which is apparently bad for the economy (I guess because it decreases the value of goods while increasing the value of money? I don't know, I'm not an economist). They also say that they alone are feeling the brunt because Asian bankers have artificially inflated their currency in order to follow the dollar's decline and shield themselves from damage. So basically, the rest of the world doesn't want to deal in US Dollars any more, because they're afraid they'll lose their value. This news comes on the heels of an announcement from Bernard von Nathaus that, as the spot price of silver approaches $10 (it's at $7.63 today) the American Liberty Dollar, a privately owned alternative currency backed by precious metals instead of guns and debt, will switch to a $20 base, effectively doubling its value relative to the US Dollar. Silver, anyone?

Posted by Kenny at November 20, 2004 12:13 PM
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