Since 2000 the $ has lost 40% against the EUR.
Investors are worried of the increasing budget deficit
and how the US will keep financing it while waging a
war that has no end in sight. Until today, Bush has
only cut taxes, but hasn't cut any spending.
Obviously, an unsustainable policy.
Either Bush will either have to raise taxes at some
point, or he will have to cut spending. Considering
his blind faith in Tax cuts, he probably will chose
the latter. Cuts will probably occur in spending for
welfare assistance or other social programs.
If he doesn't do anything, the $ will further devalue.
LT interest rates will move up, pressuring economic
growth.
I'm obviously a little less bullish now that Bush is re-elected. I thought Kerry would win, but there are some forces at work in US society that favor Bush.
Still, I expect the emerging tech trends I have described before to prevail, even in a climate less conducive for growth.
So I remùain a bull, although a little bit more cautious
alexander
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