[QUOTE=Gatopescado]
Don’t worry your pretty little head. The economy is fine and will take care of itself. Switch off the TV and go outside.
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Actually it doesn’t bother me all that much, people have survived worse. It just made me wonder if the richest people could reverse the current trend.
[QUOTE=RyJae]
But if the dollar goes to far down wouldn’t other countries stop using it, in turn causing the “wheelbarrow full of dollars” for a loaf of bread thing? Couldn’t China and other nations that buy are debt think its a good time to get out of it?
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Whatever else is being said, this is a good time to remind everyone that there isn’t actually that much U.S. debt being held in foreign hands. Even if China dumped every U.S. dollar it had, it would be a small fraction of the total supply of U.S. dollars.
This is also as good a time as any to point out that the yen is worth a miniscule fraction of the dollar and always has been, but nobody ever thought the Japanese economy was in trouble.
A currency going up or down ten percent causes a lot of headlines but simply isn’t a portent of catastrophe.
[QUOTE=RickJay]
Whatever else is being said, this is a good time to remind everyone that there isn’t actually that much U.S. debt being held in foreign hands.
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Note: the link below is to a pdf file.
Foreigners own 44% of all U.S. Treasuries, according to the Congressional Budget Office, which I would call a rather substantial holding. The CBO doesn’t give the percentage of agency and GSE* securities owned by foreigners, but does note that those holdings more than doubled between 2001 and 2006.
*Federal Home Loan Bank, Fannie Mae, Freddie Mac, etc.
[QUOTE=RickJay]
but nobody ever thought the Japanese economy was in trouble.
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I’m not certain what defines “trouble,” but as of 2006 Japan had experienced seven straight years of falling prices that led to two recessions along the way.