Professor Elam

I have suggested that the plot of my forthcoming international thriller will involve a plot to
dethrone the US through  currency manipulation. Well the reality of that is being reported in Forbes.   This may be a non fiction novel before I can get a publisher on the phone.

Oil transactions have been settled in dollars.   One claim for our invasion of Iraq was to stop Sadam H. from using Euros instead of dollars, thereby cutting the demand and therefore value of US dollars.  This is no small thing.  Since we are now a debtor nation, if the holders of all that debt perceive that we intend to pay it off in diminished or devalued dollars, they too would dump the dollar.  This could lead to dumping all sorts of financial assets denominated in dollars.  That would include stocks and bonds. The run up in real estate values round the world is not so much that as a reflection of increased real estate prices in devalued dollars.

Meanwhile the Dollar Index flirts with breaking 80, down from 120 just a few years back.