Sunday, January 11, 2009
A letter to the Washington Post that was not published:
Sir given that the consumer shopped until they dropped the only thing to hope for after reading Greg Ip's article on January 11 where he analysis a possible default option of the US on its public debts… is that the US does not now stimulate until it drops.
Even though there are many seminars on "How to restore Global Financial Stability" let us not forget that the most important role for the US is to preserve the global financial stability we still have, namely the current role of the dollar in the international financial system.
And so, just in case, and especially after the unsettling recent experience with the adjustable mortgages, could we not ask the US to build up its debt with long term paper at fixed rates? I mean allowing so many to anchor their boats so close to the exit of that safe-haven the dollar currently represents seems not the wisest thing to do.