u r kidding right. What is the deescalation of the dollar have to do with foreign investors. Other countries buy more American goods ............right, while you are tying on your American computer with japans components manufactured in India and sold to America Manufacturing Corporation in Israel. get real Shorts.
The stability of the dollar starts with us, in America.
It is held that this increase in foreign debt cannot go on forever. If us as Americans do not begin reducing their trade deficit, there will come a time when foreigners will become less willing to hold dollar denominated assets. This in turn will weaken the US dollar even more. Consequently, once this happens the United States will be forced to increase interest rates (maybe sharply) to continue to attract foreign investments. Higher interest rates in turn will plunge the economy into recession. In short, given the size of the current account deficit it is held that the US dollar has to plunge in a big way against most currencies, and it is not possible to avoid a painful adjustment as a result of this. It would appear that the trade deficit is a major economic problem that must be urgently addressed in order to avoid serious economic disaster.
What?
laRive
AI
