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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Robert Douglas who wrote (3386)6/4/2002 11:00:41 AM
From: chomolungma  Read Replies (1) of 3536
 
At the lows of the last recession, the U.S. Net Exports figure was nearly balanced at a negative $21 billion. Ten years later, at the bottom of this recession, Net Exports were negative $330 billion.

What happened?

In 1991 the U.S. Dollar Index was around 90. Five years later, the Index was still about 90 and the trade deficit was a still manageable $91 billion. Then the dollar began a 5 year bull market that peaked recently at around 120.

Clearly there is a very large currency component to the trade deficits the U.S. is running. A return to the levels seen in the mid 90's would go a long way toward making U.S. industries more competitive world wide.
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