http://www.economicshelp.org/blog/predictions/exchange-rate-predictions/ Economics Blog - current events and economics essays Thu, 18 Mar 2010 19:46:30 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://www.economicshelp.org/blog/predictions/exchange-rate-predictions/comment-page-1/#comment-1850 Inflation Predictions — Economics Blog Fri, 07 Nov 2008 13:48:53 +0000 http://www.economicshelp.org/blog/predictions/exchange-rate-predictions/#comment-1850 [...] Exchange Rate Predictions [...] [...] Exchange Rate Predictions [...]

]]> http://www.economicshelp.org/blog/predictions/exchange-rate-predictions/comment-page-1/#comment-248 Richard Stone Tue, 22 Jan 2008 05:01:00 +0000 http://www.economicshelp.org/blog/predictions/exchange-rate-predictions/#comment-248 Good points. I live in Asia, and what I see is that these countries are so export dependent and have so much excess capacity that if the US demand for their goods declines, as it will, their currencies will decline as well, due to internal stresses, regardless of interest rates. And it would be silly to increase interest rates just when demand was falling for goods. There were some predictions that the Peso would end up at 37 per dollar, but if I were buying dollars I would have started already, at 40.80. So much of the economics of the world is dependent on the US economy that it's not like the dollar is independent of the rest, free to rise and fall on its own. Oil prices showed an immediate reaction to the dollar decline, which acted as a buffer on the dollar decline. Even the Euro has its own weakness, as its production and manufacturing is being undercut by the Asian countries. I like the Big Mac index myself, and they are quite cheap here in the Philippines. Also, I am not retired, I am an attorney that does his work in the US while living in Asia. I did get entirely out of the stock market recently although I missed the peak by a few days. Bank loan rates here are at 12% but inflation is about 7%. And the growth rate is about 7% as well. Thanks for a well written blog. Good points. I live in Asia, and what I see is that these countries are so export dependent and have so much excess capacity that if the US demand for their goods declines, as it will, their currencies will decline as well, due to internal stresses, regardless of interest rates. And it would be silly to increase interest rates just when demand was falling for goods. There were some predictions that the Peso would end up at 37 per dollar, but if I were buying dollars I would have started already, at 40.80. So much of the economics of the world is dependent on the US economy that it’s not like the dollar is independent of the rest, free to rise and fall on its own. Oil prices showed an immediate reaction to the dollar decline, which acted as a buffer on the dollar decline. Even the Euro has its own weakness, as its production and manufacturing is being undercut by the Asian countries. I like the Big Mac index myself, and they are quite cheap here in the Philippines. Also, I am not retired, I am an attorney that does his work in the US while living in Asia. I did get entirely out of the stock market recently although I missed the peak by a few days. Bank loan rates here are at 12% but inflation is about 7%. And the growth rate is about 7% as well. Thanks for a well written blog.

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