We'll Always Have Baja

Fed Chair Mr. Andrea Mitchell sez the sliding dollar, which has dropped 40% in value against the Euro the past three years, is probably heading further south.

The Fed chief said an eventual desire by foreign investors to cut the risk of holding too many dollars may lead them away from U.S. assets, unless offered higher rates of return that would make the shortfall "increasingly less tenable." […]

Greenspan said cutting the U.S. budget gap was the best way to boost domestic saving and lessen America's reliance on foreigners to fund the huge shortfall in the current account. […]

"It seems persuasive that, given the size of the U.S. current account deficit, a diminished appetite for adding to dollar balances must occur at some point," Greenspan said.