2:24 p.m.
Dollar Falls to All-Time Low Versus Euro on Fed Rate Outlook
“The dollar posted the biggest weekly losses versus the euro since March as the Fed’s half-percentage-point interest-rate cut on Sept. 18 dimmed the allure of U.S. assets. The Fed’s trade- weighted dollar index sank to its lowest in 36 years. The dollar may extend its loss next week on reports forecast to show declines in home sales, durable goods and consumer confidence . . . “The Fed has untied the dollar and let it slip,” said Dennis Gartman, an economist and editor of the Suffolk, Virginia-based Gartman Letter.”
The Canadian dollar reached a one-to-one parity with the U.S. dollar this past week, as well, something which I have never seen before. Venezuela is already jettisoning its store of U.S. dollars, while Saudi Arabia is mulling publicly over pulling out of the dollar, too. These will only be the first to go, as China and Europe won’t just sit still while their U.S. investments sink like a stone.
The latest monetary decisions by our government have made a bad situation worse, and the sorriest part of it all is that they know this — they know that injecting liquidity and lowering interest rates this late in the game will only devalue the U.S. currency, spike inflation and reduce foreign investment to a trickle, yet their only other option is to admit defeat and let the recession happen sooner rather than later.
This is not going to be a fun next couple of years.
