(1)
>----------------------------------------------------------------------
>
>Date: Sun, 3 Mar 2002 02:16:46 -0800
>From: "dlawbailey" <dlawbailey at netzero.net>
>Subject: RE: The next Argentina? FT on the US current acct
>deficit - The dollar is no peso
>
>Then you have the trade in contraband - that's got to
>be traded
>mostly in dollars, particularly now that d-marks have to be cashed in.
<snip>
> Unless the euro really explodes as an international
>currency (and does so
>to the detriment of the dollar, which is another matter), the global
>currency will remain the dollar
(2)
>------------------------------
>
>Date: Sun, 3 Mar 2002 15:47:00 +0200
>From: "Hakki Alacakaptan" <nucleus at superonline.com>
>Subject: RE: The next Argentina? FT on the US current acct
A>deficit - The dollar is no peso
>A minor note, however: D-marks are still in circulation here and and in
>bordering countries bec of the relatively large cash-based
>gray economy.
My response:
(a) I believe I'm right in recollecting that Germany, unlike other Euro-zone states, has not set a final date for exchanging D-marks for Euros at the central bank.
On the other hand,
(b) the largest denomination Euro note is e500, but how many legitimate transactions of this size are performed in cash?
Either the ECB is expecting a lot more inflation than it is letting on, or else the hope is to supplant the dollar as the medium for hot money.
Julian