Surowiecki: worry, but not too much, about the drop in the US dollar
James Surowiecki writes on the decline of the US dollar against foreign currencies in: In Yuan We Trust, basically saying that while there's cause for worry, the impact of a collapse in the dollar or a hard landing for the US economy would be as devastating if not moreso for the holders of US debt (Japan and China being the top two) that it's in the debt holders best interest to prevent a hard landing or collapse.
In the past three years, the value of the dollar has fallen by more than fifty per cent against the euro and twenty-five per cent against the yen, and, a recent rally notwithstanding, most analysts say that the dollar is only going to get weaker in the months to come.
We don’t have enough money at home to pay for all this spending, so we borrow from foreigners to make up the difference. Because we keep piling on this foreign debt—more than three trillion dollars so far—and have no clear strategy for paying it back, people are made anxious about the United States economy; this anxiety encourages them to sell dollars, and that drives down the value of our currency.
The currency market is a great example of what George Soros calls “reflexivity”: people’s predictions about what will happen to the dollar end up having a major impact on what actually does happen to the dollar.
Posted at 13:58 GMT.
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Heading to France
Lisa and I are flying to London on Thursday for a day, and then taking the Eurostar to Paris on Friday for a short weekend in the City of Light.
Lisa has to go for work, I'm tagging along until Monday when I fly back.
I haven't been to Paris since some time in 1998 or 1999.
I love wandering around the city, occasionally glancing at a guide book but really just wandering aimlessly.
I first visited Paris in May 1995 as part of an unexpected, whirlwind tour of several IBM offices in Europe.
My first night in Paris included a fire (which, I have to admit, I all but expected as fire seemed to coincide with every www.ibm.com related meeting).
The next day I had to cobble together a working demo of www.ibm.com to run off an OS/2 laptop.
Since IBM Paris barely had network connectivity, let alone internet connectivity, I had to use IBM's PVM passthru application to log onto KGNVMC in the US (a mainframe), and then use VM FTP to grab a tarball I'd made of www.ibm.com's content, snarf it back to my laptop in Paris using some sort of host transfer protocol I've long since forgotten, and then run a variety of editing operations to get all of the links to work.
Amazingly, the demo worked fine.
As I recall the meeting, the demo was the least of our problems (as I recall, IBM's European employees were not at all happy about this “web” thing, nor that us Corporate types were being so heavy handed about the look and feel of IBM's web sites).
After Paris I spent a couple of days in Stuttgart at IBM's Boeblingen lab.
I remember absolutely nothing about that trip other than that the offices were quite nice, and no one could believe that I didn't drink coffee.
London and IBM Hursley followed next. I vaguely recall Sean Martin abusing me with some sort of stout. I'm fairly certain I made a fool of myself at Hursley (I'd thought it'd be a nice informal chat with some techies, instead I faced off a room of maybe 30-40 people from the lab; of course I had no presentation ready and could barely answer the rapid fire questions about strategy and the various issues facing the Internet).
I caught a brief side trip to Ireland to meet up with my mom and grandmother who were in the midst of a multiweek tour.
Met up with the cousins in Dunlavin and then headed back to the UK.
All in all it was a fun, but exhausting trip.
I ended up going to the UK about twice a year for the next couple of years, and managed to return to Paris a couple more times.
Anyway, we're heading that way this weekend.
I'll try to post pictures to my flickr account but may not be able to do so until I return since, for the first time, I'm travelling abroad without the stinkpad.
Posted at 21:21 GMT.
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