Dollar’s Slide Gives Rise to Calls for New Reserve

The dollar has come under attack from abroad as the economic crisis has played out, thanks to the Federal Reserve’s decision to flood a seized-up financial system with liquidity last fall. The central bank’s moves likely staved off deflation, but the massive influx of new dollars has devalued existing ones.

Foreign nations are worried that the massive U.S. national debt and rising shortfalls are not being addressed. And though inflation is not yet a concern in the United States, a prolonged slide in the dollar’s value could lead to higher prices for consumers.

Watch the video “Oil producers to oust dollar?”

For the American consumer, a falling dollar means U.S. exports sell better overseas, which can lead to more jobs here. But it also means imports costs more, which means higher prices at U.S. stores. Read more…

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