The dollar and the euro are both turning into weak currencies: the Federal Reserve cut interest rates by 0.25% this week and signalled its intention to lower rates further in the near future. The main reason for this move is the Fed’s concern over a potential deterioration in the labour market, which could quickly push the economy into a recession. While such a correction is not necessarily disastrous—and can even help to cleanse the market of misallocated investments and loans—it will also result in a significantly larger government deficit. This in turn raises questions about the long-term sustainability of U.S. public finances. If confidence falters, financial markets could face severe turbulence, potentially triggering a deep economic crisis. Inflation, however, is....
