Reply #39: The price of cheap mortgages [View All]

http://www.louisianaweekly.com/cgi-bin/weekly/news/articlegate.pl?20040614o

In America, we revel in our low interest rates. Mr. Greenspan has seemingly brought us a utopia of cheap money, but the cost has been the reputation of our money abroad.

Throughout Eastern Europe, and most of the continent for that matter, the American dollar was the lingua franca of money -- accepted and acceptable everywhere. As the real value of the greenback has plunged, so has the enthusiasm of merchants and others in Europe to take it, a dangerous precedent for the American economy.

Three years ago, one Euro amounted to less than the value of a U.S. dollar. (At one point,.89 U.S. cents bought one Euro, so low the reputation was of the new currency.) Today, 1.23 U.S. buys one Euro. Almost a quarter of an American's buying power in Europe evaporated in less than 30 months. Dollars used to be accepted in shops across the European continent from West to East -- most of the time with more enthusiasm than the local currency.

Now, stores that never hesitated to accept a Jackson, Lincoln, Franklin, or Grant turn pale at the prospect of seeing a Greenback. Tourists from other countries, who always came armed to Europe with dollars, now would not consider it.

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