Mike, The inflation side is two fold. First, we are a debtor nation and we run huge trade deficits. Not as huge as this most of the time, but still, a trade deficit of some proportion is the norm.
That being said, I can see a scenario where the dollar simply won't buy as much goods in the future. Yes, there are plenty of goods available, but there may be more dollars. So, you could end up with deflation in resource rich countries while we suffer inflation. Which would mean that those cos may do poorly in their own currency, but look great in dollar terms. Some of that happened in a slightly different scenario in 1974. Japanese cos. were not growing much in yen terms, but in dollar terms, they were kicking butt and taking names later. Any basket of Japanese stocks you bought went up because the buck was in a nosedive.
I don't think this is the highest probability, but it is certainly possible. The dollar may be the commodity most in glut.
MB |
