Asian banks positioned to threaten U.S. economy

Suppose that one of the Asian banks starts to dump its reserves of American currency. This extra supply of U.S. dollars would lower the “price” of the dollar-the exchange rate between the U.S. dollar and other world currencies. Other major players may be tempted to sell their own dollars before they lose more value, creating a speculative cycle and a rapidly dropping exchange rate. The price of imports would rise, increasing the cost of living and of doing business. This increase could create a