23 ms·

http://www.economist.com/opinion/displaystory.cfm?story_id=12009702 http://www.economist.com/opinion/displaystory.cfm?story_id=1... http://www.economist.com/fi

by wheels 18y ago

http://www.economist.com/opinion/displaystory.cfm?story_id=12009702 http://www.economist.com/opinion/displaystory.cfm?story_id=1... http://www.economist.com/finance/displaystory.cfm?story_id=11985948 http://www.economist.com/finance/displaystory.cfm?story_id=1... An extremely oversimplified answer is that it would hurt confidence in the dollar, which would further damage its status as the foreign federal reserve currency, which would cause further inflation in the US.

richcollins 18y ago
It seems to me that allowing them to fail would help the dollar by tightening credit.
- wheels 18y ago
  When foreign federal reserves switch their reserve stash from dollars to something else, the dollars are basically "created" on the market as one currency becomes instantly less available and the other instantly more available.