February 10, 2004

Race to the bottom  

Edward Hugh has a concerned post up about the euro, which nearly reached its all-time high with respect to the dollar today. While the dollar must keep falling to motivate growth in the US and help mitigate the enormous American current account deficit, the worry is that the euro won't be able to sustain such high values — values further distorted by the linking of some Asian currencies to the sinking dollar.

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