Dollar at record low against euro: “It seems now that the longer-term investors like pension funds and perhaps monetary authorities are either hedging their dollar risk or moving assets out of the United States. It looks like the dollar has further to fall…”
You can check out the historical data using Oanda’s FXGraph applet: choose “from USD“, “to EUR“, “since 6 Nov 1996“. Note the trend over the last four years, and extrapolate….
What will this mean for the US economy? Unless the budget and current account deficits are slashed, the probable consequences are rising interest rates, rising inflation, a depressed housing market, and recession. We’ve seen this before: it’s called stagflation. Welcome to the 1970s. Even the oil prices look familiar….
(Via the BBC.)