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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (2648)	3/22/2004 10:20:50 AM
From: Tommaso	Read Replies (1) \| Respond to of 116555

Europe is, of course, a mixed bag and the Euro is a new concept in money. But despite problems, I think most European countries are on a firmer economic basis than the US is right now. France is especially strong, producing a large part its energy needs with nuclear plants. But if the European banks cut rates and then if the US raises rates, the dollar could temporarily stabilize against the Euro. I think it will continue to fall against resource-rich country currencies (Canada, Australia) and also against the major Asian currencies. Unless something drastic is done to make the US less dependent on imported energy, however, and unless Americans start saving instead of borrowing, the decline of the dollar could be very severe over the next 5-10 years. The big story, however (IMO) is going to be huge commodity inflation that is already well under way and could continue for ten years, more than doubling prices of commodities in nominal currency units over that time.