Given printing money helps to dilute away the massive American debt, and given America understands the need of countries like China to keep their people working which occurs due to exporting of goods to America, and given the massive military expenses abroad, is there really any side the dollar will strengthen relative to other currencies?
try to think 1. real goverment deficit including Iraq, Stimulus etc. will be around 700-800 bil this year and higher next years 2. trade deficit 800 bil 3. real inflation probably double digits 4. real GDP probably somewhere around -5% 5. interest rates negative 6. central bankers around the world trying to diversify from US$. 7. According to different estimates USA looses its overall wealth with the speed from 1% a year to 1% a month US economy face tramendous structural problems - there will be no recovery. We can't continue consumer economy as we don't have any money. We can become export economy as we don't have money to buy comodities and our workers are not ready to work for 1$ per our yet. I don't know if US$ will bleed for years ot it will be the quic end. But there are no chances for recovery Actually it ca happen - if federal government will stop its deficits immediately, will stop lying about inflation and Federal reserve increase rates above inflation. But we all understand - aliens will come first before it happens
Yes it already has as you have seen. The Fed signaled it is not lowering rates again and may increase. Will the Euro go back to 1.28? Maybe in 3-5 years or when someone gets some balls to do the right thing. Choose your poison a full blown housing meltdown ( higher rates ) or some form of recession ( right now ) possibly stagflation. Either way the future ain't so bright