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Politics : High Tolerance Plasticity

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To: chowder who wrote (22104)	11/3/2004 12:55:37 PM
From: bull_derrick	Read Replies (3) of 23153

Dabum regarding the weak dollar, the news media paid little mind to George Soros selling the dollar to try and hurt Bush. It takes more weak US dollars to buy the same BBL of crude oil than if it were strong US dollars. While crude has gone up over the past year, it's gone up far more in US Dollar terms than in Euro terms, which was the idea that George had in mind. We swung from .85 up to 1.24 the other day which is about a 50% currency swing over the past few years. Of course, the other components are a lower US interest rate from the Fed and larger trade surplus imbalances. The wild card on the last point is China's fixed currency rate to the USD. The Yuan would strengthen if allowed to float. The administration needs to put a hard press on China to allow it and that in turn will help balance out the balance of trade over time. I read a few months ago that Wal-Mart now accounts for 10% of China's exports and gets priority at its docks because of it. If the Yuan were floating and the Chinese products became 20% more expensive, I believe it would affect product mix at the retail level.

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