isabella on Nostr: 1980s excerpt: Is the dollar about to collapse? He announced that Fed policy will ...
1980s excerpt:
Is the dollar about to collapse?
He announced that Fed policy will continue to be "accommodative," allowing the money supply to grow.
That could translate, traders calculated, into still lower interest rates, which would make it less attractive for foreign investors to hold dollars. Volcker insists, though, that he is "not interested in jumping on a decline of the dollar and pushing it lower."
He maintains that the answer to the problem of the overvalued dollar is a reduction in the budget deficit. As Volcker pointed out, a drop in the dollar is dangerous because the U.S. depends on the inflow of foreign capital to finance the deficit.
Is the dollar about to collapse?
He announced that Fed policy will continue to be "accommodative," allowing the money supply to grow.
That could translate, traders calculated, into still lower interest rates, which would make it less attractive for foreign investors to hold dollars. Volcker insists, though, that he is "not interested in jumping on a decline of the dollar and pushing it lower."
He maintains that the answer to the problem of the overvalued dollar is a reduction in the budget deficit. As Volcker pointed out, a drop in the dollar is dangerous because the U.S. depends on the inflow of foreign capital to finance the deficit.