2008-09-18

US Dollar dropping again

The Coordinated Central Bank action to pump money around is having an effect - the US Dollar has dropped by 1% in the last six hours.

I'm thinking this has to be a no-win situation. The credit crunch is leading to a flight into cash, which is drying up as share prices drop. The central banks pump more money in to compensate, but end up devaluing the currency.

In other words, the problem gets transferred into the value of the dollar. Look out for capital flight (as I mentioned earlier) and a plunging dollar. Ouch.

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