I can remember a time when the SDR value of the US dollar was above 1.00! What we have is desperate measures for desperate times. But, don't despair. What the Fed may do is responding to an opportunity provided by the Bank of Canada which lowered interest rates so as to slow down the rise in the Canadian dollar. Its one thing to have your currency appreciate by almost 30 percent, but think what that does to your competitiveness.I am not sure whether this amounts to a series of competitive devaluations, but isn't that what the IMF was set up to limit in the post war period? Or, just maybe this is the opportunity for American investors abroad and all those international investor abroad to bring their money back to the US dollar. We used to think of it as speculation. But, what if the dollar is expected to rise with the election of Hilary Clinton or Barack Obama in a coming election. Maybe, I am reading behind the lines here, but is this a policy that is supposed to help the economy or worsen it.
Will this policy of lowering interest rates lead to a more even distribution of incomes or will it create an opportunity for speculators? I wonder what you think. What I do think is that whoever wins the US election in the fall, it does not matter that much because it represents a sea change from the oil interests dominating the US economic scenery. Sure the oil interests will be making money, but, perhaps, the policies that need to be put in place to protect our environment will finally have an opportunity.