Canada's exports are damaged, and its dollar fell below 68 U.S. cents in mid-June. And South American nations too have felt the effect. Economic destabilization creates political problems. While nobody can read the future, economists try. Some of them now say the remarkable U.S. economy risks inflation while others foresee the possibility of deflation.
Plausibility supports their concern.
The impact of either would, of course, be catastrophic for the U.S. securities markets and, by extension, the entire world economy. And the political consequences would be unfathomably complex and dangerous. Even Alan Greenspan concedes this. But Greenspan, the Federal Reserve chief, and Treasury Secretary Robert Rubin, know that no economy, even the world's largest, can escape the dark whirlpool if it is allowed to grow any larger. E.W. Scripps Publications , All Rights Reserved.