Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Knighty Tin who wrote (16630)	11/23/2004 11:21:53 AM
From: microhoogle!	Read Replies (1) of 116555

I am trying to see positives in declining dollar. 1. Housing bubble might not burst. Assuming house prices are stagnant, the value of house will be diminished along with diminished dollar value. 2. Trade deficit with countries like China and other asian countries will become less of an issue as they will eventually be forced to unhinge their currencies from dollar. This will increase US Exports and reduce imports. 3. Increased inflation will devalue the value of debt that US owes. 4. Americans will be forced to spend less as prices will increase. Whatever they spend (if there is anything that remains to be spent) will be spent increasingly in products attributable to local economy as imports will be priced higher. Foreign travel will be curtailed and domestic tourism might pick up. Anything else that can be added ? Looks like there is a method to the madness of the current administration - Encourage as many people to own property during the first term - make them feel good about their perceived property values and then creep up the inflation to catch up with the inflated values of property :-) I am a rookie in economics so don't flame my newbie ideas yet :-)

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