Then I really disagree greatly with Saville. Unless he sees a catastrophic exodus of foreign money (Saudi money?) from our markets before the end of the year, the dollar is not going to collapse. The Yen might actually creep down against the dollar (not much, but just a little here) and the Euro should stay within the recent range just around parity plus minus 5%. Why, because the dollar strength or weakness measures a number of ongoing processes. The very negative one, as I have mentioned many times, is our expanding balance of payments deficits. The positive ones are the natural strength of the host economies (thus investments in growing economies might be more rewarding than in declining economies). The Japan story is too well known, and as of now, I see nothing short of a miracle, changing Japan's problems. Germany has huge economic problems and an economy with potential growth much worse than ours, and since they are now linked to the Euro by their naval, they have no monetary freedom to stimulate their economy and are rapidly approaching the fiscal limits imposed by the Euro. Any process to free their labor markets to be more flexible and thus encourage movement of labor from less efficient to more efficient endeavors, even if it will become an accepted policy (grave doubts about that), will take a long time to be implemented (it took us almost 10 years in the mid 70/mid 80). Eventually, Germany's problem will take the rest of Europe down, and Japan's problems the rest of Asia down and the seeds of a major world wide recession sometime in the 2004/5 time frames will have been sewn. In the interim, I believe that despite our excessive deficits (balance of payments), the weakness of competing currencies, will balance that major negative for the dollar for a little longer.
Zeev
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