Market Watch
Debunking the Dollar’s Doomsday Theory |
By Andrew Gordon Now that Thursday’s 362-point drop is a few days behind us, let’s pause a second and try to see the big picture. Though it may not feel like it, three of our major asset classes are up for the year: stocks, bonds, and commodities. Only the dollar is down. |
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| Debunking the Dollar’s Doomsday Theory |
| Tuesday, 09 October 2007 | ||||||||
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I don’t believe that the dollar’s decline will cause a “Dark Age” to strike the heart of America. And I don’t think that we will ever need to carry around gold- or silver-backed currencies again (at least not in the U.S.). All that should happen is that the dollar won’t be the world’s reserve currency anymore. Maybe it’ll be the euro or eventually the yuan. Or maybe the world will realize that they should hold a basket of currencies as reserve, instead of just one country. Who knows? We haven’t even gotten to that point yet. All I know is a cheaper dollar means imports into the U.S. will be much more expensive (killing Wal-Mart’s edge in the process). And U.S. exports will be cheaper (making domestic manufacturers much more money).
It also means that a lot of currencies out there will continue appreciating against the dollar. And if you’re not making money from the dollar’s decline, you’re missing one of the biggest money-making opportunities you will ever see. Source : Investors Daily Edge
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