Tuesday, March 29, 2005

Dollar At The Tipping Point?

"President George W. Bush's new budget proposal," writes Altman, "would substantially expand the government's debt burden in the next decade, potentially raising doubts about the desirability of its IOUs. Some Asian central banks have declared that they will diversify their reserves away from dollar-denominated assets. If China decouples the yuan from the dollar, it will not need as many dollar-denominated assets to keep its currency from gaining value, nor will its competitors for export markets.


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