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IPFS News Link • Economy - Economics USA

Sam Zell: US Standard of Living in Peril From Dollar's Weakness

The US standard of living could drop 25 percent if the dollar loses its standing as the world's reserve currency, investor Sam Zell told CNBC. "My single biggest financial concern is the loss of the dollar as the reserve currency. I can't imagine anything more disastrous to our country," the chairman of the Tribune Company as well as Equity Group Investments said in a live interview. "I'm hoping against hope that ain't gonna happen, but you're already seeing things in the markets that are suggesting that confidence in the dollar is waning." As Zell spoke, the value of the greenback took yet another hit as European Central Bank President Jean-Claude Trichet indicated that an interest rate hike was possible next month if euro zone inflation continues to heat up. The dollar reached a four-month low against a basket of foreign currencies as well as the euro. Trichet's remarks came a day after Federal Reserve Chairman Ben Bernanke addressed Congress and gave no indication the US central bank is preparing to exit its zero-interest-rate policy in place since the financial crisis began. At the same time, the dollar was suffering under the weight of huge debt and budget deficits in Washington that threatened the currency's standing among its global trading partners. Should trends not change, Zell said, the effects could be disastrous.

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