Tuesday, October 2, 2007

Oct 1, 2007 cont...

Following my prediction on a higher inflation by next quarter showing up this would definitely lead to a significantly weaker dollar, looking on the dollar index charts, there is significant downward momentum, i don't think the dollar has been this low for many years. The only way this weak dollar, would not weaken further if the interest rates were raised... there is no way the Fed is going to do that with current economic conditions. If anything this is better for long term recovery, domestic production should spur, and we should be exporting more, which should help the balance of payments deficit. This current weakening in the exchange rates for the US all reflects this.

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