♠ Posted by Emmanuel in Casino Capitalism at 4/09/2009 03:58:00 PMWe must first note that dollar strength is relative. That the dollar only commands 0.7575 (1/1.32) euros or 100 yen last time I checked--the two other major currencies--needs to be put into perspective. Nevertheless, George Soros reprises many themes given here before. First, the US doesn't seem to be taking the advice it liberally dispensed to other countries in years past. That is, the "Washington Consensus" held for everyone else except Washington itself. Second, the US is not hesitating to abuse its currency as the only issuer of the world's standard reserve unit--because it can (at least so far).
Consequently, Soros puts forward the interesting notion that gaining a measure of how messed up the world financial system is should include the dollar rebounding from, say, mid-2008 despite spectacularly collapsing economic activity Stateside. How long will dollar repatriation flows mask its true worth?
You'll have to visit Yahoo! for the interview as I can't embed this particular clip.