The More Fed Chairmen Change, The More They Want To (Unsuccesfully) Kill The US Dollar
What dollar speculation was in 1979, so HFT is today (Tobin tax seems to be the universal antidote). Yet, even 30 years ago, cooler heads prevailed and despite contrary desires to the opposite, no doubt spearheaded by the Federal Reserve, the dollar did recover after it got once again dangerously close to the precipice.
The money (no pun intended) line from a 1979 NYT article :
The United States does not want to surrender the power of covering its big deficits with dollars that it can print or give up its role as world monetary leader. Other countries, such as West Germany and Japan, are unwilling to take on new responsibilities or a monetary role that might cause their huge trade surpluses to decline.
And now, like back then, unless countries believe they are exclusively self-sustaining and have no need for global trade ever again (don't even think this within thoughtshot of Tom Friedman or the man will suffer a quadruple heart attack coupled with a few strokes), any and all discussion about the imminent death of the dollar is quite exaggerated (despite the Chairman's unquestionable desire to roundhouse the living daylights out of every portrait with Ben Franklin on it).
ht/ Geoffrey Batt