Ramsey, this question should be addressed to George Soros, he has a knack of knowing when a currency is getting out of line with the economic prowess of the country "backing" that currency. I think that normal reading of the balance sheets of countries (but with broader definitions of liabilities and assets that most people on this thread will accept) does the job. When many of our corporate infrastructure was weakned by excessive debt and layers of unecessary management, our currency declined, now that we are a little trimmer and fitter, our currency is strong. How to actually read the whole balance sheet (including all the hidden assets fo a country, like infrastructure wich is paid for cash but never depreciated, land, natural resources in the ground, the value of an educated work force capable ofg engaging more in "brain" industries" then "brawn" industries, the value of a well developped capital market including an extremely broad base and well financed venture capital community, all count in these equations, but not being a professor of finance, I would not know how to put these equations together. I am sure that some people are doing just that and that is how they know which is the next currency against which to mount a bear raid.).
Zeev |
