The end result, as we know only too well from past experience, is high interest rates, punishing debt loads, recession, and higher unemployment. A further complication is that it takes between a year to a year and a half for the economy to fully respond to changes in the degree of monetary stimulus.
While our liquid reserves are diversified across currencies, more than half is held in US dollars, because of the greater liquidity of US-dollar markets and since potential foreign currency needs are most likely to be in US dollars.