All you money experts out there, how long will the slump of the US dollar last?
Will it get better ever? When?
Will it get worse? How much worse can it get?
What has to happen before things improve?
All opinions and theories are appreciated.
Regards
I’d say it will last until an equilibrium level is acheived in which international demand for the dollar equals the amount that the US purchases overseas.
Hmm, I’ve been taking advantage of it.
Been buying lots of stuff from the U.S.
Mostly games and DVDs. Its wonderful!
One thing I’m noticing is that the Japanese government and financial sector aren’t freaking like they did the last time this happened ('94-'95). At that time, Japanese industry was overbalanced, depending overwhelmingly on exports to the U.S. With the drop of the dollar, their products suddenly jumped about 50% in price, and sales plummeted. Major disaster for a lot of big companies.
Now, the situation is different. The companies that survived still sell a lot to America, but they’re spreading their sales around a lot more, particularly to the rest of Asia. For some electronics makers (Omron, for example, which specializes in sensors and factory automation equipment), China has already passed the U.S. as their biggest customer.
Basically, this means that Japan in general isn’t viewing the weak dollar as a crisis, and probably won’t be taking any radical steps to to try and stop it. Where this will lead is beyond me.
We recently had a conversation about this on NADS. The dollar is actually still very strong: within the past century £1 bought 4 or more, and I can remember the £/ ratio yo-yoing from £1/$2.40 to £1/$1.10.