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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (316)7/8/2007 10:39:17 AM
From: stan_hughes  Read Replies (1) of 71423
 
In the What Happens Afterward department, here's an example of the potential long-term counterveil effects of a collapsing USD (assuming traditional western style civilization continues on after the fact and we don't all die of greenhouse gases or sun poisoning or bird flu or WW3 first) --

Message 23682609

All other factors left aside, it is fundamental economics that a high currency value = high cost producer. However, it's also true that when those high cost goods are in high demand or there is little competition in producing them, it doesn't matter what the price is -- at least not until those conditions change, which in the case of the USA has already happened, unless you think what's left of leading American sectors like aerospace can support the entire economy. I rather doubt that myself.

And then there's the nasty flipside to that collapsing currency -- import costs go through the roof. The next decade is going to be a very painful transition for the USA and its consumer mentality
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