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Strategies & Market Trends : The coming US dollar crisis

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To: dybdahl who wrote (6364)4/19/2008 5:20:38 PM
From: RockyBalboa  Read Replies (1) of 71474
 
dy: is it just "inertia" ??? Or is it the monetary account of a long term trend?

A rigidity would mean that a price, or rate subject to adjustments takes time until market forces realise the new rates. The account deficit is no rate; it is the economic result of dramatic perhaps irreversible shifts in aggregate supply vs demand (Asia supplies goods at a growing rate).

We still guess, how could the new lower US exchange rate alone ensure a reversal of the decade old trend? This is based on huge investments.

Suffice to say the Yuan USD relationship and other pegs work against a reversal of current accounts.

If you say so, "inertia" is imbedded in various USD pegs.
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