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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Haim R. Branisteanu who wrote (7640)2/11/2004 1:08:28 PM
From: BEEF JERKEY  Read Replies (2) of 110194
 
Haim:

"from the link you posted, this sentence may prompt the US to change policy from a weaker USD to stabilization"

I wonder is the current administration realizes how important a decently strong dollar is.

Bush, it seems, is concerned only with re-election. His view on deficits eg. "they don't matter" - is a political statement. They don't matter for the most part in a re-election sense, most people don't even understand the basic premise of the deficit. Further, although open to debate, one can argue the tax cuts Bush is pushing are totally unrealistic in terms of the deficit, especially in light of the demographics of the USA.

But the deficits, among other powerful forces, do matter in a dollar value sense. Higher oil prices may be a minor worry to a future White House. A trashed US peso could affect the ability of the US to project power on the world stage. Here Bush for all his talk of a strong USA is failing badly.

The reality is that the longer the current forces at work against the dollar value continue the less able the US will be to “change policy” in any effective way. This would be circumstance, eg. a weaker USA, others in the world, my suspicion, China and Europe at the least, would welcome.
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