Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 267.08

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3:59 PM EST

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To: XBrit who wrote (69898)	4/22/2003 2:48:45 PM
From: chomolungma	Read Replies (2) of 70976

However, if the rest of the world starts taking its investments away, a mechanism for trade reduction which is pretty unpleasant for the US will start. Dollar drops much further, imports become more expensive, etc. Actually, it's quite the opposite. A decline in the trade deficit will stimulate the U.S. economy and provide needed profits that will fuel investment spending by corporations. Fully 25% of S & P 500 earnings come from abroad and the dollar boosts these in several ways. The dollar decline is a good thing! If our trading partners fail to account for this demand shift, their economies will suffer. I doubt that in the face of low and falling inflation and rising unemployment they won't do so. This is exactly what megabear Stephan Roach says is needed. Fortunately, he is dead wrong on pent up demand being lacking. There will be plenty of demand as the U.S. takes up slack and moves back toward full employment.

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