Cause for Concern

Lost in the headlines last weeks with all the hullabaloo over the criminal behavior by AIG executives and management was the plunge in value by the US Dollar relative to other global currencies. Actions by the Federal Reserve in pumping over a trillion dollars into the economy and their buying up of shaky assets sent the dollar downward, and the descent is probably nowhere near being finished. The results are likely to be twofold: a marked decline in purchasing of treasury bills by the Chinese and others, both in the short run and in the future; and a likely move by prices towards being inflationary rather than being deflationary, a highly destructive and painful trend for nearly all American consumers. The Federal Reserve is pulling out all the stops in trying to resucitate the US economy, but their actions are likely to cause as much collateral damage if not more in the Fed's attempts in trying to be beneficial.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNdu22y30zwc&refer=worldwide

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