If a new person to this forum or a person that has limited knowledge about economics were to read the threads in this sub-forum they would think that the dollar is doomed and that the US economy is done for... However, the markets do not reflect that.
Yet for all these worries, the dollar has come through the recent turmoil surprisingly well. It initially gave up some of the ground it made over the summer but swiftly recovered.... The persistent foreign demand for American assets is remarkable given all those scares.
The dollar has some temporary stability since foreign holders of the Yankee dollar are frantically buying up solid American assets before their dollars are worthless ---- as your quote from the Economist magazine left-handedly admits. Whatever is left of value in the USA is being sucked overseas, leaving us the bones to pick over. The same thing happened to Russian assets when the Soviet Union collapsed.
I regard the reporting of the Economist magazine the way I do what I find in the kitty-litter box. They beat the drums with frantic enthusiasm for the Iraq War.
Also, their issue just before September 15 was notable for the almost total lack of indication of an upcoming crisis. If they were unaware of a crisis which many of us saw coming, it does not say much for their "expertise". If they did know about it and did not mention it to their readers, then why read the bloody rag?
I, for one, would not dream of buying the Economist. I glance at it when I visit the local library in order to find out what middle-managers are being brainwashed into believing.
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