"Generally this means higher interest rates, a slowing economy and a lower currency"....
"Asia continues to fade and the US economy cools. This is the most talked about outcome among the "Bears" and those who fear recession. Under these circumstances interest rates would decline, the US dollar would decline"....
"This would enable the US dollar to decline and a shrinking trade deficit to pull the US economy up just at the time it needed it"....
"I believe the flows will turn when the dollar turns and makes investing in US assets more an exercise in swimming upstream".....
Robert,
I take it you aren't bullish on the greenback. :) Now, in the "for what it's worth" department, and this may scare you, Jimmy Rogers on CNBC this morning, agrees with most of what you said.
I agree with you about a weakening dollar would stem foreign inflows(key part of our good old "liquidity" argument), but (IMHO) I don't understand, from a layman's viewpoint, how the greenback could trend towards weakness. It is going to be a long time before there is a "perception" that Japan's economy will be stronger than the US. After all, isn't this supposed to be a primary driver of the currency markets?
It just seems to me, forecasting the weakness of the greenback, for the reasons you state, is sort of putting the cart before the horse. But I know for a FACT, you can run circles around me when it comes to economics! So I don't have much too stand on except what may be my naive views (and my propensity to be contrary to what Jimmy Rogers thinks.<g>).
Thanks very much for your opinions,
MikeM(From Florida) |
