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

To: carranza2 who wrote (83302)	8/17/2008 9:33:17 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 116555

That's a great point which is totally being overlooked. The US Trade balance has to adjust but can only do so in two ways: dollar depreciation/slower growth in the U.S. If the USD is going to appreciate because the rest of the world is slowing, it puts the nail in the coffin for our economy as we can no longer "export" our way out of this. Bernanke got checked when he cut rates so fast to 2%. A simultaneous rate cutting with the rest of the world, may have made dollars less appealing. Instead, BB created a huge dollar carry trade which is unwinding. This was the crux of my question to Mish a few days ago. Message 24849467 I suspect the dollar has probably bottomed as there isn't very much real estate in terms of rate cutting to go, while the Europeans and British can cut away. We may retest the low 70's on the Dollar Index when BB takes rates to 1%. In terms of currency moves, the situation is not too different from the early 90's.