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To: zonder who wrote (240168)	5/12/2003 9:53:43 AM
From: Box-By-The-Riviera™	Respond to of 436258

nice post. thanks!

To: zonder who wrote (240168)	5/13/2003 4:13:15 PM
From: Hawkmoon	Respond to of 436258

The real Democles' Sword is the possibility that it may lose its hard currency status - i.e. countries switching to the EUR or a basket of currencies for their hard currency holdings, OPEC starting to quote oil prices in EUR, etc. Imagine how the market will be flooded with USD if THAT happens... It's always a possibility. But the last thing I believe many European exporters desire is a strong Euro. In effect, as was noted in an article I read somewhere this morning, the US is exporting deflationary pressures to Europe. European markets might appreciate the currency fluctuations, but now European companies are losing the export subsidization that a low Euro represented for them. The SecTreasUS, Mr. Snow effectively has implied that a weaker dollar is more near long term trading valuations and would be beneficial to US export growth as well as a bit of artificial price inflation from any imported parts. But the real agenda, IMO, is a tacit form of protectionism. It is Bush telling our competitors that we're not particularly inclined to subsidize their inefficient economies and semi-socialist welfare states. It will pressure those economies to restructure and take the necessary steps to restore competition. And one might suspect that to facilitate this, a low oil price would also be beneficial. High oil prices require more energy consumers to hoard US dollars in order to purchase oil. And when Iraq comes back on line later this year, oil prices will likely be even lower, permitting even lower USD prices without necessarily inviting double digit inflation. Btw, I echo another responders comment.. Nice post! Hawk