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Old 05-22-2006, 10:16 AM
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cygnus cygnus is offline
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Member Since: Jun 2004
Location: Washington D.C.
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Default Re: The Dying Dollar

Quote:
Originally Posted by trailblazer
If the dollar gets TOO weak, not only will the U.S. be less able to borrow, it will create inflationary pressures. You of all people on this board should know that.
Yes I am aware of this. The inflation primarily effects foreign goods and services since a depreciating dollar does not effect dometically produced goods and services, this gives domestic goods and services a big benefit not only from increased domestic demand but also increased foreign demand. An increasing borrowing costs doesnt sound like a bad thing either considering the FED has been trying to jack up interest rates for almost 2 years but long term rates have remained stubbornly low. So once again it is not really clear how a weak dollar is necessarly bad - like every thing it has positive aspects and negative aspects.
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