Joining the view of Bloomberg's Michael Sesit, Breakingviews.com finds that the US Dollar is attractive -- because of the unattractiveness of all the other options:
US fundamentals are dreadful, too. But policy-making could hardly be more
activist. It is in essence a huge gamble on recovery. For now, the world
would rather take that gamble and buy the multitude of treasuries the US
government is issuing than contemplate anything else. The reserve currency
will forge ahead. Unless the world starts to think the big US wager is going
to be a losing one.
I'm torn about what the US might really want for the dollar. It seems like it's politically correct to say you want a strong dollar, but a weak dollar is good for exports. Those exports were a major component of the stock market's rise from 2002 - 2007.
Posted by: Michael Comeau | March 11, 2009 at 09:19 PM
Michael: True, every administration says it want a strong dollar. But the opposite is true. And the very long term trend for the dollar has been down ever since the Fed was created in or around 1913.
Posted by: John | March 12, 2009 at 10:00 PM