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U.S. Dollar Will Weaken, Currency Crash Possible, Roubini Says
Sept. 4 (Bloomberg) -- The dollar will weaken and the U.S. risks seeing a crash of the currency unless it does more to control the deficit and reduce debt, said New York University Professor Nouriel Roubini, who predicted the financial crisis.
“If markets were to believe, and I’m not saying it’s likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar,” Roubini said in an interview today in Cernobbio, Italy. “The value of the dollar over time has to fall on a trade-weighted basis, but not necessarily relative to euro and yen.”
Roubini said he didn’t see a risk of a dollar crash in the “‘short term.” The value of the U.S. currency relative to currencies such as the yen or the euro “cannot change too much compared to current levels because if the dollar were to weaken a lot and the euro strengthen a lot, that’s going to warp any chance for the European economy to recover, same argument as to the yen,” he said.
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http://www.bloomberg.com/apps/news?p...d=a.SW_71xPhjA
Sept. 4 (Bloomberg) -- The dollar will weaken and the U.S. risks seeing a crash of the currency unless it does more to control the deficit and reduce debt, said New York University Professor Nouriel Roubini, who predicted the financial crisis.
“If markets were to believe, and I’m not saying it’s likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar,” Roubini said in an interview today in Cernobbio, Italy. “The value of the dollar over time has to fall on a trade-weighted basis, but not necessarily relative to euro and yen.”
Roubini said he didn’t see a risk of a dollar crash in the “‘short term.” The value of the U.S. currency relative to currencies such as the yen or the euro “cannot change too much compared to current levels because if the dollar were to weaken a lot and the euro strengthen a lot, that’s going to warp any chance for the European economy to recover, same argument as to the yen,” he said.
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http://www.bloomberg.com/apps/news?p...d=a.SW_71xPhjA
Bears still growl at the Sanctum Sanctorum of the policy elites
By Ambrose Evans-Pritchard Economics Last updated: September 4th, 2009
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What is to be done? Roubini says the United States (but the same goes for almost all the old powers) must set out a clear plan to bring its colossal deficits under control step by step, year after year, to kick in after the worst of the crisis has abated.
Any attempt by the US to inflate its way out of this debt trap risks setting off a “disorderly collapse of the dollar”.
Washington will not opt for this deliberately. Unfortunately, it may drift into such an outcome as the path of least political resistance.
Yes, but I can see plenty of other candidates for this sort of beggar-thy-neighbour somnambulism.
Others may yet beat the US to currency debauchery.
http://blogs.telegraph.co.uk/finance...policy-elites/
By Ambrose Evans-Pritchard Economics Last updated: September 4th, 2009
...
What is to be done? Roubini says the United States (but the same goes for almost all the old powers) must set out a clear plan to bring its colossal deficits under control step by step, year after year, to kick in after the worst of the crisis has abated.
Any attempt by the US to inflate its way out of this debt trap risks setting off a “disorderly collapse of the dollar”.
Washington will not opt for this deliberately. Unfortunately, it may drift into such an outcome as the path of least political resistance.
Yes, but I can see plenty of other candidates for this sort of beggar-thy-neighbour somnambulism.
Others may yet beat the US to currency debauchery.
http://blogs.telegraph.co.uk/finance...policy-elites/
sounds familiar
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