February 9, 2008

The Weakening Dollar, or, Looks Like A Long Time Until We Can Go Back To Europe

It's a measure of the relative economic strengths of a country as to which nation's currency enjoys wider acceptance. This makes it very disturbing to see that stores and restaraunts in New York City have begun accepting payment in Euros.

Historically, it was hugely to the advantage of the United States since the end of World War II to have the U.S. dollar be the preferred currency for the rest of the world. Before that, the British enjoyed a century of economic power reflected in the fact that the Pound Sterling was almost universally accepted. Before that, there were Guilders and Ducats and Florins -- which were accepted as legal tender for transactions as far away as China and India.

Now, though, a sustained poor fiscal policy -- and the manipulation of our monetary policy to make up for it -- has weakened the U.S. Dollar so much that in the very citadel of American capitalism, a foreign currency is becoming welcome.

Senators McCain, Clinton, and Obama -- how do you plan to make the dollar strong again? Or do you even care?

1 comment:

Michael Reynolds said...

I've clearly picked an excellent time to move to Europe. I should be broke within six months.