Greenspan Warns That U.S. Deficits Pose Risk to Dollar
Sunday, November 21, 2004 at 03:31AM
TheSpook
Alan Greenspan came to the home of the euro on Friday and
suggested that the relentless decline of the dollar might well
continue, offering little relief to those here who worry that the
United States is seeking to gain a competitive advantage for its
industries from a weaker currency. In a speech to a banking congress
here, Mr. Greenspan, the chairman of the Federal Reserve, said that
ballooning foreign borrowing on the part of the United States poses a
future risk to the dollar's value. He said that foreign investors, who
help finance the large American trade and budget deficits by buying
Treasury securities and other dollar-denominated assets, would
eventually resist lending more money to the United States, causing the
dollar to fall further. [more]
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