With the Federal Reserve's discount rate at 3%, the lowest in 30 years, investors in Europe and Japan are seeing their worst fears confirmed as the dollar tests all-time lows. Political realities in Washington mean that interests rates and the dollar will more than likely fall even lower.

The federal Reserve policy has the appearance of a capitulation to election year expediency. Ironically, it will do little to alleviate what the Bush administration calls the "credit crunch."

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