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What's Keeping the Dollar Down?
Posted on June 15, 2008
The dollar is first and foremost a political instrument. Part of its historic appeal has been its stability, and its link to so many elements of world trade and dollar contracts. While it is not gold-backed, the dollar can be used to purchase oil which allows people to look beyond our fiscal management (including both our growing current account deficit, and our GAAP deficit). It is a reason to hold dollar reserves.In spite of the existing oil backing, there has been a steady movement for dollar holders to diversify away from the dollar, and since its formation in 1999, the Euro has m...
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