On Wed, 28 Jan 1998, Richardson_D wrote:
> Thus we get to the question as to what to replace it [the U.S. dollar as
> world reserve currency] with. This is a
> very hard question for the individual but also for the monetary
> authorities -- there just aren't many currencies out there that look
> good just now.
The yen and DM are a bit undervalued right now, mostly because their
central banks are more concerned with propping up the global financial
system -- which, incidentally, they own -- via superlow interest
rates (yes, at 2.2% GDP growth, 1.7% inflation and 3.3% short
rates, even the Bundesbank has turned stimulative) than with stuffing
the portfolios of their rentiers. But consider this: Central Europe plus
Japan gives you $10 trillion of GDP and $20 trillion of rocksolid
financial assets -- or at least, solider than the US, which amounts to
the same thing. How about a caffeinated blend of the euro and the yen --
the "yeuron"?
-- Dennis
