The Dollar in Danger

Overseas investors are skittish about investing in the US, in light of the recent sub-prime mortgage defaults. The US government functions by taking on debt. But as foreign investors resist investing in low-yield government notes and similar instruments described as low risk, the dollar sinks in value. The value of many currencies and commodities, including oil, are linked to the dollar. So many global players keep a close eye on the dollar, and despite the recent decline in value, are not about to dump bonds and notes, triggering a collapse. Few viable options exist for an alternative currency, writes Sebastian Mallaby, columnist for the Washington Post, who urges that “an alternative global currency needs to be the long-term goal.” – YaleGlobal

The Dollar in Danger

Sebastian Mallaby
Wednesday, November 14, 2007

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