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

To: TobagoJack who wrote (33741)	5/15/2003 1:08:37 AM
From: elmatador	Respond to of 74559

Nope. I don't buy that argument, Jay. The drop of the USD vs the basket of currencies (against which it dropped 15%)with the Euro shouldering much of the brunt was in the cards for at least 13 months (end of April 02). Now if someone was betting that the dollar would be defying gravity he deserved to lose his shirt.

To: TobagoJack who wrote (33741)	5/15/2003 1:29:26 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

What if a dollar drop doesn't recover the US economy in a similar way the interest rates' drop failed to get the US economy out of the Bust? It means will drop and drop and drop. See, internal consumption answers for 70% of the American the Gross Internal Product (if services are included it is higher than 70%) and that US GIP is 33% of the world's GIP. And in April retail sales dropped. Most important, sales of construction materials dropped and real estate was supporting the not so strong 1.6% growth of the US economy. The Euro gained against the USD but the defict didn't reacted!!!! If the US internal demand is rigid, (i.e., it requires those imported products even though they become more expensive) USD dropping against the Euro or against the basket of currencies, it means imports will not drop from Europe or from elasewhere. Perhaps the USD has to drop 20 or 30% more. But that it will cause a lot of problems!! For Brazil, a strong Euro is good for the exports. The Brazilian Real apreciates gaisnt the USD but depreciates against the Euro. But if it appreciates against the USD, it can be difficult.