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Strategies & Market Trends : The coming US dollar crisis
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To: gregor_us who wrote (2976)12/17/2007 3:32:26 PM
From: Real Man  Read Replies (3) of 71475
 
Exactly right, imho. A negative current account deficit +
falling interest rates is a powerful combination. We'll get
short covering rallies occasionally, but overall trend will
be lower until something changes in the dollar equation.
The current account deficit has to improve at some point.
However, as long as the Fed encourages speculation at
the expense of manufacturing, that won't happen, and the
current account deficit will remain "structural", i.e.,
independent of the dollar value. The other thing that
can drive current account deficit down is a recession,
and, perhaps, that's what the market is betting on right now.
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