From the International Herald Tribune
Alan Greenspan came to the home of the euro on Friday and warned anxious Europeans to expect little relief from the dollar's relentless decline against their currency.The Euro is now worth $1.30. I remember when it was worth less than a dollar. Cue the "What, me worry?" music.
In a speech to a banking congress here, Greenspan, the chairman of the Federal Reserve, said the persistently high U.S. current-account deficit posed a risk to the dollar's value, as foreign investors would eventually resist buying more American assets.
"It seems persuasive that, given the size of the U.S. current-account deficit, a diminished appetite for adding to dollar balances must occur at some point," he said. "But when, through what channels, and from what level of the dollar? Regrettably, no answer to those questions is convincinGreenspan likened predicting the dollar's path to "forecasting the outcome of a coin toss."
