Well you know it can't go on forever.
There is a limit to how low it can go.
The currency imbalance is becoming so great that soon the Europeans will just be able to buy everything up.
But everything moves in cycles.
In the current economic downturn, the U.S. is the first one in.
The first to have a housing collapse.
The first to slash rates.
And we'll be the first out of the morass.
International trade data is released tomorrow, it should indicate continued gains in exports.
Largely offset by a surge in crude prices, but solid gains nonetheless.
The Europeans and Japanese are concerned about keeping their products competitively priced.
It behooves them to cooperate with the U.S. Fed, as they did this morning, to bolster the dollar while increasing liquidity.
Rate cuts from Europe can't be far behind.
Once they start cutting, the oil/gold trades should be on hold for a while.
Tuesday, March 11, 2008
Weak-dollar trade nearing the end?
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