How low?

We’ve long assumed that a collapsing dollar would take the global economy with it, but perhaps we were being too pessimistic? After all, the Dollar Index has fallen by 45 percent since 2002, but life goes on. Moreover, when the greenback slipped to historical new lows on Friday, hardly anyone seems to have noticed.

And where does the White House stand? In an interview last week, veep Cheney hinted that the government would take a hands-off attitude toward the US currency. "We do believe in a strong dollar,” he said, “but we think that the key is that it be allowed to adjust based on market forces out there, and that's exactly what's happening." To speak of the dollar’s wholesale collapse as an “adjustment” is like saying that the fiery collapse of the Trade Towers was an adjustment to airborne traffic. Not only has the Dollar Index slipped to historical lows in recent days, it has entered an airless void on the charts (see above) without so much as a token word of support from anyone high up in the U.S. Government.

~Rick Ackerman, Rick's Picks

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