>When, I wonder, will this take a toll of American currency? In view of the
>US current accounts deficit, doesn't the Fed's lowering of interest rates
>pose a serious risk to the dollar?
Bloody good question, but not one the equity markets appear to be asking yet - they're all busy positioning themselves for the May 15 rate cut - as if (should it come) it'll be an unambiguous and costless little freebie (and as if it'll necessarily fix spiralling unemployment, rather than just encourage more debt-financed buying of currency-slashed foreign goodies). BriefingsCom has it that Warren Buffett is buying things called zero coupons, which apparently constitutes a bet on a series of rate cuts and poor market returns.
>Also, while it's a mistake to assume other nations will put their money
>where their mouth is, couldn't the rising level of global anti-American
>sentiment (e.g., the US's eviction from the UN Human Rights Commission)
>portend waning international interest in subsidizing profligate US
>consumption, even if the US is hallowed as the key engine of the world
>economy?
Well, I guess foreigners (whose money is currently joining all the other pre-rate-cut partying) have to find somewhere to put their dough. Neither Europe (drooping demand, decreasing capacity utilisation and increasing inventories) nor Japan (drooped demand and already low capacity utilisation) are particularly attractive.
That said, I'd just squeeze my wad (were I possessed of one) under the bed for now (or try to buy some Ozzie oil asset while the Oz wallows around the 50c mark).
Anyway, clearly, Uncle Sam has most firmly decided they needn't give a toss about what others might think of them (they might be following the advice I'm told Saatchi'n'Saatchi gave the French government when it contemplated fixing France's image abroad after the Rainbow Warrior killing and the Muroroa Atol business: 'Let's not waste money on a campaign without hope, and just start from the premise everybody hates you anyway').
Cheers, Rob.