Is the Falling Dollar a Threat to U.S. Security?
The falling dollar is alarming, but is it a threat to national stability? National Intelligence Director Michael McConnell recently included the falling dollar as a weakness that could be exploited by U.S. rivals, especially energy rich ones.
But Mark Chandler, the top currency strategist at the investment banking firm Brown Bros. Harriman, says the dollar's woes may be worrisome, but they hardly rank with terrorism, the threat of cyberattacks and danger posed by various foreign hot spots. "Far be it from a currency strategist to disagree with U.S. intelligence agencies over the threats to the U.S., but of all the potential threats to U.S. security, the dollar is simply not one of them," he writes. "... The greenback's depreciation in recent years is simply an unwinding of its gain in the second half of the 1990s."
Security worries appear to stem from the decision by some oil producing countries, notably Syria, Iran, Libya and Russia, to be paid in currency other than the dollar. "McConnell gives us a warmed over domino theory as if Syria, Iran and Libya have abandoned the dollar and others will follow suit. Hardly. Such an assessment seems to exaggerate the role of these countries. ... The other oil producers and most notably Saudi Arabia have indicated no desire to shift the benchmark for oil away from the dollar," Chandler writes. Source- www.kiplinger.com
