Oh, they'll switch. I don't know if it'll be to the Euro, but they'll switch. Right now our policymakers are throwing the kitchen sink at stopping asset price deflation. Employing inflationary policies to counter both moderates the severity, and delays the turn. But since we're in crisis mode, we're not doing any planning around how we're going to remove the inflationary policies when the time comes.
Combine that with massive fiscal deficit, and you have a recipe for inflation and dollar devaluation. It's played out exactly this way many times in many parts of the world throughout history.
Here's the thing: everyone else is doing the exact same things. And we're starting from a better place than most everyone else (lower government debt-to-GDP ratio). All currencies will likely lose value against real assets. But as far as currencies go, the dollar will probably do the best.
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Oh, they'll switch. I don't know if it'll be to the Euro, but they'll switch. Right now our policymakers are throwing the kitchen sink at stopping asset price deflation. Employing inflationary policies to counter both moderates the severity, and delays the turn. But since we're in crisis mode, we're not doing any planning around how we're going to remove the inflationary policies when the time comes.
Combine that with massive fiscal deficit, and you have a recipe for inflation and dollar devaluation. It's played out exactly this way many times in many parts of the world throughout history.
Here's the thing: everyone else is doing the exact same things. And we're starting from a better place than most everyone else (lower government debt-to-GDP ratio). All currencies will likely lose value against real assets. But as far as currencies go, the dollar will probably do the best.