After a brief favorable bump upon the capture of Saddam Hussein, the dollar continued to slip, reaching record low levels (one euro now costs $1.23). According to this Reuters article , a selloff of the dollar will continue, only to abate with possible good economic news. Abate momentarily, but then continue, because the unsoundness of the dollar is based on structural defects in the US economy, in particular the massive trade deficit that is building up at record levels, month after month.
There may come a time when those who are keeping the dollar from free fall by making supportive purchases decide to abandon ship because of the declining value of the dollar. If so, we are in for a rugged adjustment in America and, likely, globally.
All of Bush's positives listed in the previous posts will then come to naught, and he'll be another Bush one-termer.
While I agree that the Democrats must now--immediately--stop stabbing each other in this pre-primary period (Kerry and Lieberman's recent attacks on Dean are disgusting), and must come up with a positive message in order to attract votes, it wouldn't hurt their chances if the economy should tank.
I'll keep you--and myself--posted.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment