Small but important...

Just like Alan Greenspan!

The former Brainiac in Chief noted that

"We're beginning to see some move from the dollar to the euro, both from the private sector ... but also from monetary authorities and central banks,"

Beyond the fact that its a rare direct statement from the former Convoluted Speaker in Chief, this little sentence is worth watching. If the Euro starts eating into the dollar as the monetary unit of choice, less dollars will be bought, increasing our interest rates, which makes it more difficult to sustain Cheney's guiding economic principle, "deficit's don't matter." We finance our debt through the world's use of the dollar as the denomination of choice. Any ripple in that could drastically affect our economy through increased interest rates (if no one wants the dollar at a particular interest rate, the rate must go up to attract buyers). I suppose the good news is that excess dollars in the global market means a dollar devaluation, making our exports cheaper. However, a dollar devaluation also increases the cost of imports (but not Chinese imports, China's currency is pegged to the dollar - meaning as the dollar devalues, so does the Huan. This also largely offsets our export gain as we cannot match China's cost of production). Cheap goods, as you all know, are the reason that American's are enjoying a higher standard of "stuff" living, while real earnings are flat or falling. Take cheap goods away and that changes. Will the increased cost of imports be off-set by more jobs created for exports - I doubt it, we just don't make much anymore, and like I said, we cannot compete with Chinese manufacturing.

The concern for the dollar as the global currency has been out there since the Euro's debut. After the Euro's rocky start, this concern abated. But as W went on his historic spending spree, the concern returned. To hear Greenspan, the Former Evadist in Chief, directly address it means the concern is becoming reality. Sorry Stalin, but we have to get our spending under control.