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Strategies & Market Trends : CFZ E-Wiggle Workspace -- Ignore unavailable to you. Want to Upgrade?

To: skinowski who wrote (6242)	4/15/2008 9:53:04 PM
From: Moominoid	Respond to of 41599

The dollar's move would be limited by this mechanism (which in the longer run is going to drive it to maintain some form of purchasing power parity (PPP)). Unless the Fed started printing money to accommodate the shock the effect would be recessionary on the economy. Currencies can't go forever in one direction against others unless the central bank prints money faster than other countries. And looking at M3 etc. is misleading in trying to understand this IMO. They can stay a long time far from the PPP equilibrium though. The US is now seeing this kind of a recessionary effect from the collapse of the housing bubble. So I'd be more concerned about that effect than inflation.