Fears of dollar collapse as Saudis take fright

Quote from dhpar:

that would be pretty stupid. the US trade balance is in deficit mainly with China and that is not influenced by US monetary policy...RMB is fixed...
to forsake inflation fighting credential for decreasing deficit with Canada is idiotic - and on top of that loonie is commodity currency, i.e. $ imports will actually rise because commodities will rise....
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It seems crazy but remember just a little over a week ago - on 9/11 apparently - he warned of the dangers of the trade imbalance:

http://www.washingtonpost.com/wp-dyn/content/article/2007/09/11/AR2007091100824.html

To me it is just too coincidental that he puts up 5 points yesterday after that speech. The Fed is the master of "foreshadowing", i.e. they pretty much tell you what they're going to do and then do it...
 
key point: The Federal Reserve, however, clearly calculates the risk of a sudden downturn is now so great that the it outweighs dangers of a dollar slide.
 
Quote from empee:

Its illegal in the US not to take US dollars as payment.
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Not strictly true. While Dollars are 'legal tender', merchants are neither obliged nor required to accept them in exchange for goods and services. As long as no prior debt exists at the time of tender, they can demand payment by any means they wish.

In fact it's quite common to see gas stations and 7-11s refusing to accept any bills over twenty after dark.
 
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