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Buckle Up for the Dollar's Ride
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Issue
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| Contributor | RP |
| Last Edited | RP Mar 28, 2005 06:34pm |
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| Category | Analysis |
| Media | Newspaper - New York Times |
| News Date | Monday, March 28, 2005 12:00:00 AM UTC0:0 |
| Description | Bridgewater says it believes that the dollar is already beyond the point of no return. To keep the currency at its current value, private investors will have to buy more American securities as central banks desert them, said Robert P. Prince, the firm's co-chief investment officer. Before private investors will act, they need to see a higher return from American assets, relative to assets carrying similar risks abroad.
So, instead of allowing the economy to adjust purely through higher interest rates, perhaps causing another recession, Alan Greenspan and his colleagues at the Federal Reserve will have the luxury of allowing the dollar to do some of the heavy lifting. The numbers? Bridgewater predicts a further decline in the dollar of 30 percent, especially against Asian currencies, and a rise in American long-term rates of one-half to one full percentage point. |
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