Meanwhile the Dollar Further Devalues

While you were out:

Treasury Secretary Henry Paulson told Congress on Wednesday the government will hit the current debt ceiling on Oct. 1. The limit is $8.965 trillion. Unless Congress votes to raise it, the country would be unable to borrow more money to keep the government operating and to pay debt obligations coming due.

and

The Canadian dollar set a 30-year-high Tuesday, closing at 98.64 cents US after investors got word of a drastic interest rate cut south of the border. Economists say it could only be a matter of days before the loonie reaches parity with the American dollar.

Which it did. And

According to an advance copy of an interview to be published in Thursday’s edition of the German magazine Stern, Greenspan said that the dollar is still slightly ahead in its use as a reserve currency, but added that “it doesn’t have all that much of an advantage” anymore. The euro has been soaring against the U.S. currency in recent weeks, hitting all-time high of $1.3927 last week as the dollar has fallen on turbulent market conditions stemming from the ongoing U.S. subprime crisis. The Fed meets this week and is expected to lower its benchmark interest rate from the current 5.25 percent.

and

THE world’s investment banks are to reveal a $30 billion (£14.9 billion) hit from bad debts as they unveil results that give the first real insight into the impact of the debt crisis.

Then there’s the $9 billion missing in Iraq. Thanks Bremer.

Bank of America raises ATM fees to $3.
Across the other pond:

Since the credit crisis started shaking the world financial markets this summer, many professional traders have taken big losses. Another, less likely group of investors has, too: middle-class Japanese homemakers who moonlight as amateur currency speculators.

One thought on “Meanwhile the Dollar Further Devalues

  1. Thomas

    What does congress like best? Spending. Of course it will up the limit on Uncle Sam’s credit card.

    The huge federal debt (on top of fiddling with the dollar) will contribute to the US financial woes. The federal government needs to drastically cut spending. Who is willing to do that?

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