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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: gregor_us who wrote (7797)	2/11/2004 8:25:40 PM
From: CalculatedRisk	Read Replies (2) of 110194

lp: My feeling is JWCB's notion does not go far enough! Quoting:JWCB's "notion that a falling dollar is not curative to the US trade deficit--because we have lost so much of our industrial capacity to even take advantage of a weaker currency." If OPEC is marking to the EURO (as it appears), and most of Asia is fixing to the US Dollar, what does a falling dollar really get us? To answer this question, lets look at the numbers: For October, the trade deficit was reported as $38 Billion SOURCE: census.gov Of that $38B, about half ($19B) was with Asian countries marking to the dollar. (Some countries are fixed like China, others are trying to hold their currency to the dollar like BOJ) census.gov Another $10B was in Oil / petroleum products that is now being marked (at least it appears so) to the Euro. census.gov If every other country was "flexible", that would mean the dropping dollar only impacts about 25% of the trade deficit! If my simple analysis is correct, JWCB is optimistic! Best to all.

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