The dollar became the world’s reserve currency because of all the world’s economies, that of the United States could be best relied upon to be governed by rational ideas and be ruled by law, rather than governmental whim. People are wary of the dollar today for a variety of reasons, but not least of which is the worry that come January, 2009, the United States will not be as friendly an investment climate as now. With the Bush tax cuts set to expire, the worry is that if you keep your money in the US, you’ll find yourself hit with a rather large tax penalty because liberals in the United States want to tax “the rich” (which actually doesn’t mean taxing real rich people, but works out to taxing productive people and capital).The dollar has collapsed because everyone's been afraid of the end of Bush's marvelous tenure!
With Democrats in control of Congress and at least an even money chance that a tax and spend ultra-liberal will be sworn in come January, it might be a good time to hedge your bets on the United States and move your money into Euros…or into oil futures. On the other hand, a McCain victory - especially if accompanied by more GOPers in Congress - would be seen as a signal that taxes will remain low and America will remain open for investment.
Shall we review the US Dollar against the Euro over the course of the latter's lifetime, including a year of Clinton and 7 years of Bush?
I can't even write anything snarky b/c this theory is so inane.
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