Quote:
Originally Posted by GreyWolf
The theory sounds good pk, but reality is a little different. But, sure, there should be at least some increase in exports which will obviously help.
Reality is the 40ish year trade deficit and a reliance on imported product. Can't see that changing one bit other than an an upwards cost of imports (because they are gonna be paid by currently weak dollars). Imports grossly overwhelm any exports and it would take a total industrial revolution to begin to balance that scenario and have "exportable goods" to offer.
For good or bad - tho suspect more bad, - the dollar will continue to decline for... who knows, but possibly ten years ahead. There is nothing on the horizon to give any hope of otherwise and a serious debt problem where utterances from the Fed and ex-Fed reps suggest a problem even paying interest on the debt. This is total shit news and not helped by the stupid oil consumption which contributes to around at least 30%+ of the trade deficit. If that was reduced even fractionally - it would help a lot, but not likely to happen. The sooner "someone" addresses this problem, the better. It is being ignored by the current incompetent mob who obviously just don't care.
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I'm just speaking objectionally from what a lot of economic analysts have said. You are just saying whatever would make the US looks bad. It's not a difference in reality, just which one of us has an agenda behind us.
I think a 10 year fall is impossible to predict. There are a ton of variables in place and we have never seen these circumstances before in economic history. I'm not sure I agree with what Bernanke did by lowering interest rates as I felt some of those industries needed to pay a price for their mistakes and the most important factor is inflation. But he feels liquidity is more important, and that then he can raise interest rates and strengthen the dollar again. It'll be interesting to see if he's right, I think he is a bright man.
Nonetheless, the US Dollar was overpriced at the beginning of the decade. Imports kept expanding while exports were negative. We're seeing that finally correct itself as imports are down and exports are up. But the dollar will continue to fall for awhile and I foresee it at $1.50 to the Euro by the end of the year. A recession would suck for everyone on the board, but might be best for the long term. I'm not horribly opposed to it in my current situation. Still, it's just part of the game and all we can do is ride the ups and downs like everyone else.