You are looking at the wrong things. The real danger of a sudden and drastic change in exchange value of any currency is not its impact on trade, but its impact on structured finance - derivatives. This is particularly true with the dollar and dollar interest rates. The Russian bond default, of no signifiacnce in term of the golbal sovereign debt market, brought dowm LTCM, which if the Fed did not step in, would have caused a liquidity meltdown in the financial system.
Henry C.K. Liu
The other thing that stikes me as a potential non-starter is the notion that making the dollar cheaper will increase sales in Europe. --------------------------------------- Adding to this, the effect of the depreciation will be diminished. US GDP is about $10 trillion. $800 billion of that or 7% is exports. The US share of EU imports and exports is about 10%.
- Monday's WSJ Front Page and pg 15-triumph of the GT?, Clifford Poirot Tue 20 May 2003, 14:56 GMT
- Re: Monday's WSJ Front Page and pg 15-triumph of the GT?, Henry C.K. Liu Tue 20 May 2003, 15:55 GMT
- Re: Monday's WSJ Front Page and pg 15-triumph of the GT?, Gunnar Tomasson Wed 21 May 2003, 16:02 GMT
- Re: [gang8] Re: Monday's WSJ Front Page and pg 15-triumph of the, Henry C.K. Liu Wed 21 May 2003, 16:43 GMT
- Re: [TNF] Re: USD goes cliff-diving again, Henry C.K. Liu Tue 20 May 2003, 14:49 GMT
- Robert Pollin's "Contours of Descent", Lee, Frederic Mon 19 May 2003, 19:25 GMT
- US trade deficit, Joerg Wenck Mon 19 May 2003, 15:24 GMT
- job openings for heterodox economists, Lee, Frederic Mon 19 May 2003, 15:24 GMT
- Re: [A-List] Re: [gang8] Unemployment and Tax Cut, j.schukte.baeuminghaus Mon 19 May 2003, 15:21 GMT