All the pundits here have come out as one to welcome this soft landing and its implications both for Australian interest rates and its currency. But, we don't want so much of a landing that foreign money leaves Wall St, do we? If it did that (and mebbe even in hard times, I suppose there might be no less worse place to have your money than on US markets, I s'pose), wouldn't the US find itself unable to fund its current account? Wouldn't the greenback then come under a lot of pressure? Wouldn't Greenspan then be moved to up interest rates to protect the dollar? Then we'd cop a vicious circle, wouldn't we?
Seems to me Greenspan could find himself torn between the need to protect the greenback (keeps US market buying goods and services from fragile markets and keeps foreign productive assets coming under US control) and let the greenback droop to protect US capital investment, employment and all those millions of residential debtors. The political pressure would come for the latter option, I suppose, but Greenspan'd be messing with a very fragile international economy if he obliged, wouldn't he?
Anyway, am I overstating the problem, d'ya think? Or have I just missed something big?
Cheers, Rob.