“The greenback’s fall is stoking fears of a global crisis. Behind the slide: a world economy wildly out of balance.”
http://www.msnbc.msn.com/id/7170226/site/newsweek/
I’m interested to see peoples’ opinions of the above article. As an American abroad with about 95% of my savings in American dollars, it’s a situation of daily interest and impact for me. Plus we’ve been having some really great discussions and debates here lately.
Well, I’m no economist. But I did find the article interesting, particularly the order in which the apparent “solutions” to the US Dollar’s problems were presented throughout, and especially at the end of the piece:
“The question now is whether everyone can go straight, before the addiction becomes self-destructive. It is whether the Asians can curb their export dependence; whether the Europeans can revitalize their economies; whether the Americans can control their overconsumption.”
An interesting article, however, one must keep in mind that the major news magazines (Time, Newsweek) are notoriously bad at predicting economic trends. The cover article might foretelll a shift in the trend. I’d guess we have a good three or five years before any sh*t hits the fan. When it does it will probably unfold in ways unforseen, often with a surprise catalyst.
As to your own situation, spending pounds and having savings in dollars, that must be anxiety producing. With interest rates as low as they are, you could certainly consider moving a portion of your savings into UK denominated assets. Would only be worth the trouble if it is a considerable sum because of transaction costs. Considerable means different things to different people.