Studyandtrade
You will find the answer to your question if you have a close look at the expansion in the US money supply over the years (do a google search) and consider how much further the US dollar will drop once Bernanke starts printing money in earnest to avert a downturn in the US economy. The dollar decline, the credit bubble and bubble in asset prices are all reflected in the money supply. What the Fed has failed to understand is that economic expansion can only be sustained over the longer term through savings and production rather than borrowing and spending. You should also consider the size of the US current account deficit and how the long term fortunes of the US dollar will not turn around until there is a sizable improvement in it. You can also consider has much worse the fate of the US dollar could have been if not for the stupidity of our Japanese and Chinese friends, and how the US has used them quite successfully up till now to export its inflation to the rest of the world. Imagine for example where the US dollar and the US inflation rate would have been if not for the generosity of foreigners (the Japanese alone for example invested a massive (as I recall) $320 billion in US debt instruments in 2003 and yet the yen still rose against the dollar) .
You will find the answer to your question if you have a close look at the expansion in the US money supply over the years (do a google search) and consider how much further the US dollar will drop once Bernanke starts printing money in earnest to avert a downturn in the US economy. The dollar decline, the credit bubble and bubble in asset prices are all reflected in the money supply. What the Fed has failed to understand is that economic expansion can only be sustained over the longer term through savings and production rather than borrowing and spending. You should also consider the size of the US current account deficit and how the long term fortunes of the US dollar will not turn around until there is a sizable improvement in it. You can also consider has much worse the fate of the US dollar could have been if not for the stupidity of our Japanese and Chinese friends, and how the US has used them quite successfully up till now to export its inflation to the rest of the world. Imagine for example where the US dollar and the US inflation rate would have been if not for the generosity of foreigners (the Japanese alone for example invested a massive (as I recall) $320 billion in US debt instruments in 2003 and yet the yen still rose against the dollar) .
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