Saturday, December 5, 2009

Requiem for the Dollar

The dollar is faith-based. There's nothing behind it but Congress.

But now the world is losing faith, as well it might. It's not that the dollar is overvalued—economists at Deutsche Bank estimate it's 20% too cheap against the euro. The problem lies with its management. The greenback is a glorious old brand that's looking more and more like General Motors.

...

There's no business value in financial safety when the government bails out the unsafe.

James Grant in the WSJ