It seems crazy but remember just a little over a week ago - on 9/11 apparently - he warned of the dangers of the trade imbalance: http://www.washingtonpost.com/wp-dyn/content/article/2007/09/11/AR2007091100824.html To me it is just too coincidental that he puts up 5 points yesterday after that speech. The Fed is the master of "foreshadowing", i.e. they pretty much tell you what they're going to do and then do it...
Sell dollars when they are worth something. Drive the price down and buy them back. 87 all over again. Runningbear
key point: The Federal Reserve, however, clearly calculates the risk of a sudden downturn is now so great that the it outweighs dangers of a dollar slide.
Not strictly true. While Dollars are 'legal tender', merchants are neither obliged nor required to accept them in exchange for goods and services. As long as no prior debt exists at the time of tender, they can demand payment by any means they wish. In fact it's quite common to see gas stations and 7-11s refusing to accept any bills over twenty after dark.
Actually, Pizza Patron takes pesos, mi amigo: http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/010607dnbuspesos.31047f5.html