[Homestead] Falling dollar

Don Bowen don.bowen at earthlink.net
Thu Dec 2 13:59:42 EST 2004


In today's paper there was an editorial addressing the two schools of 
thought on the fall of the Dollar.  One school says it will drop a bit 
further then stabilize at its right point.  They are predicting mild 
inflation and a difficult adjustment period but little beyond that.

The other school claims a much more dire scenario.  Paul Volker (the fed 
chairman before Greenspan) is expecting a further slide to as much as 40% 
of its current value.  He is saying that if the slide is not arrested then 
we will see a spike in interest rates, a slowdown of economic growth, and 
heavy inflation.  He is concerned that the fall is endangering oil 
countries profits and will they demand higher prices and a shift away from 
the dollar.  Foreign investors who have kept up the dollar up may quit and 
shift investment to other currencies such as the Euro.

Don Bowen
Awl Knotted Up Woodworking
Valley Center, CA             http://www.braingarage.com





More information about the Homestead mailing list