Originally Posted by kishg
not to get into an macro-economic debate here but increasing interest rates (What greenspan did) does not devalue the currency, rather it should increase demand for dollars as money inflows to take advantage of the higher rates. the USD is currently under pressure due to speculation in currency markets that the fed will continue rate cuts in light of the current credit crisis.
What makes you think I was referring to Greenspan eventually increasing the Fed rate? I was actually referring to Greenspan cutting the Fed rate all the way down to 1% and keeping it there for years. He should not have lowered it that much, and kept it there for so long. That's what Greenspan did. He eventually had to raise it, but it was too late. We are now beginning to suffer the mid-term effects, which won't go away by re-lowering interest rates just because idiots got themselves into trouble in the securities and mortgage markets with cheap money that was made available to them by Greenspan. The Dollar has been in trouble for a long time now because of low interest rates. You can't speculate against a currency that doesn't have an underlying problem.