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Politics : Formerly About Applied Materials
AMAT 268.17+0.1%Dec 8 3:59 PM EST
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To: chomolungma who wrote (69908)4/23/2003 10:24:25 AM
From: Sun Tzu  Read Replies (2) of 70976
 
I say we are devaluing USD ala reversing the strong dollar policy and you say it was overvalued and is returning to normal...I say tomato, you say tomotto...I don't see a big difference here.

As you have pointed out, USD is off 16% and if it falls as much as you say, then we are all one-third poorer in the future. That is a very big drop in asset values. Why would you want to sit it out and not convert your assets right away if that is how you see it?

I agree with you that the stock market bubble also crept into USD. But what we really should have done then, was to buy out all the foreign assets. Too bad it did not happen but that is the nature of bubble.

I can think of a few outcomes and I don't know which will come true. There are two things I am sure about. The first is that weak currency is only good for net exporter economies which we are not. The second is that if I were a foreign investor and I thought USD is going to keep falling, I would take back my money.

Being a believer in the free market economies, I am not going to argue these are bad things. In the long run, they may end up being just what the doctor ordered. But I don't know what this means for US over the next 5 years. There are too many unknowns here.

ST
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