Antique store owners in lower Manhattan, ticket vendors at India’s Taj Mahal and Brazilian business executives heading to China all have one thing in common these days: They don’t want U.S. dollars.
Hit by a free fall with no end in sight, the once mighty U.S. dollar is no longer just crashing on currency markets and making life more expensive for American tourists and business people abroad; its clout is evaporating worldwide as foreign businesses and individuals turn to other currencies.
Experts say the bleak U.S. economic forecast means it will take years for the greenback to recover its value and prestige.
Negative dollar sentiment is growing in nations where the dollar was historically accepted as equal or better than local currency — and dollar aversion is even extending to some quarters in the United States.
Associated Press, March 14, 2008:
The Federal Reserve invoked a rarely used Depression-era procedure Friday to bolster troubled Bear Stearns Cos. and said it will provide even more help to combat a serious credit crisis.
Senior Federal Reserve staffers said the arrangement allows JP Morgan Chase to borrow from the Fed’s discount window and put up collateral from Bear Stearns to back up the loans. (JP Morgan, a bank, has access to the discount window to obtain direct loans from the Fed, but Bear Stearns, an investment house, does not.) JPMorgan Chase is providing an undisclosed amount of secured funding to Bear for 28 days, backstopped by the Federal Reserve Bank of New York.
This type of procedure, Fed officials said, dates back to the Great Depression of the 1930s but has rarely been used since that time.
Delivering a speech on the economy in New York, Bush voiced confidence in the Fed’s actions to aggressively cut interest rates and the Fed announcement last week that it would supply up to $200 billion in loans to cash-strapped financial institutions.