Originally Posted by quant

Mahathir Mohamad is a fascist. He doesn't like the idea of free markets.

An economic catastrophe won't only be caused by the dollar. Other currencies have major problems and throughout Europe there are highly leveraged deals that stress the entire system.

Read the bottom of the article: Considering 40% or more of our debt is owned by foreigners, a major decline would adversely affect our investors. Plus, the lower the dollar goes the cheaper our exports become (Bush wants this). This means other countries' currencies appreciate making exports more expensive (lowering their GDP), which is why China has continued to peg their undervalued currency to the dollar to maintain their manufacturing exporting dominance.

Regardless, the dollar is the reserve currency of the world, the Federal Reserve mosts controls the BIS (the central banker's bank), who's ungodly reserves are now held in the IMF's SDR (1 = 45% USD, 29% EUR, 15% YEN, 11% GBP). And of course the IMF devours smaller economies. It's survival of the fittest and I'm sure Wolfowitz will continue this at the World Bank.

Traditionally we could just go to war with the creditors and destroy them, the biggest being Japan, China, and the UK. We will eventually reach a bifurcation point which will either result in global financial chaos as we fight (more) wars for resources or adapt to radical rapid changes (if technology can produce our energy needs). But that's a few years off.

It still is a guarantee that the EUR/USD will make all time highs this year.