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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (177342)	7/4/2002 10:11:45 AM
From: Les H	Read Replies (2) \| Respond to of 436258

Moving right along, the next reason for disquiet is the US domestic situation. The President is hell bent on raising the amount spent on armaments to higher levels than has been seen for many a year. America is adopting a war footing. The only trouble here is that the rest of the world is still on a peacetime basis. The President thinks we are wrong. We too should be following Uncle Sam's lead and boosting our arms expenditure all round. But his words are falling on deaf ears. So America is placing itself at a very severe disadvantage in global terms. It recalls those Vietnam years when the French irritated the hell out of the Americans by using their dollars to switch into gold at a time when they could still buy it at 35 dollars an ounce. Which raises the possibility that we may see that happening again. Why has the gold price being going up recently? Surely it is this global nervousness which at long last is pushing dollars into the yellow metal? The only hope on the horizon is that a falling dollar will be good for American industry. They will respond. Exports will rise and hopefully imports, especially as they become more expensive, will fall. Eventually the enormous deficit will start to yield. In the meanwhile, and it could be quite a long meanwhile, what will happen? We could be in for a period rather like that in the mid thirties when currencies competed with the dollar to get lower rather then higher. In a world where the outlook for trade is suddenly looking more doubtful, having the cheapest currency is going to be perceived as an advantage. the-weekly.net