as if that had changed! LOL!!!!
Did I say that? You gave a past example and I replied in the past tense. Sorry, but I do not debate semantics.
BTW, where, exactly, did I say that current account deficits are the sole determinannts of currency exchange rates? Why put words in my mouth? I was simply stating that currency exchange rates affect the economies - and hence the markets - of net exporters and importers in a different manner, which is pretty basic knowledge, and which you seemed to lack.
As for what determines currency exchange levels themselves was never part of the debate. But, that too is simply a matter of supply and demand. On a relative scale, there is a less demand for US good and services compared to foreign goods and servies, but there is an overwhelmingly more demand for US assets over foreign assets. The net effect is that US dollar is bid up.
I would have recommended the articles in the section Exchange Rates and the Balance of Payments from Krugman's book Currencies and Crises, but stick to reading charts.
BTW, the hypocrisy in this thread is amazing. A few month's back, the demise of the US market seemed clear from the weakening of the dollar. No one remembered the mid 80's at that time. Then, just as the US dollar started to strengthen, it became less relevant and the early 90's were calle dupon to buttress that argument. Well, ladies and gentlemen, isn't it high time to stop pretending as if these are consistent, well thought out positions? Why not just follow Luc en masse and conclude that come what may the US market is doomed, even if it is not? |
