| GST, How about answering this simple logic. Let's say, 1 USD fell to 0.5 Euro, then to 0.25 Euro, then to 0.1 Euro and so on. If your argument is that, yes it will fall at that rate in an hour or a second, then I dont want to continue this argument with you. Assuming, you atleast believe that it will fall over a year, 5 year - then I've this argument for you: As the USD falls, inflation (My belief is only PPI will go up - however, for argument purpose, let's assume CPI also goes up) goes up. Now, do you think interest rates will still be 5%? I'm assuming, you are not that stupid to assume, FEd will not fight high inflation but will only fight deflation. If you believe, even under high inflation (not hyper inflation) Fed wont increase the interest rates, then there is no firther argument either. I believe Fed will increase interest rate. Say, it goes to 20%. Do you still think USD will fall against Euro if Euro interest rate is 3%? You think interest rate differential dont matter? What if Fed offers 100% interest rate? 1000%? At point will your logic concede? |
