Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: smolejv@gmx.net who wrote (12286)	12/30/2001 6:44:18 PM
From: Moominoid	Read Replies (2) \| Respond to of 74559

The weaker dollar is the main mechanism I am expecting to be at play in the second dip of my expected W of US economic activity. It will be self-generating once underway. Foreign dudes continue to put money into the US as long as they expect interest rates to go down (counter to conventional stylised facts because they are buying long bonds and stocks not cash) and the US dollar up. The US dollar therefore has risen in a self-fulfilling prophecy. Once they think the opposite will occur the process goes into reverse. Rising interest rates and (maybe) inflation will likely cause that change in perception. If we just go straight into recession from here, US demand for imports will decline and the requirement to fund the then declining trade deficit will disappear and so the dollar could remain strong. That will be a shallower recession scenario IMHO.