Mervyn, I shall soon write a synopsis of a US and Global economic outlook based not on one but on two of North America's leading economic and market analysts. Their credentials are impeccable. Each of them have 40 years of market experience and they are both alumni of different Ivy League business schools besides being CAs, CFAs and MBAs. Sufficiently credible wouldn't you say?
For now, let me specifically address your para below based on their views. You wrote: What is worth reading now is that the US has been debauching its economy for the past eight years as: 1) A currency is only valuable if it is in limited supply. 2) Lowering interest rates effectively devalues your currency. 3) No country, ever, has built a strong economy on a weak currency. 4) Printing more bank notes leads to inflation. 5) And sometimes, STAGFLATION. If you think the above makes sense, look for a instrument other than the US dollar to store your wealth. My Comments: Currency basically has two fuctions - a store of value and a medium of exchange. In today's world nobody (except of course the hapless person who strores money in a mattress) uses any currency in the world as a store of value. The strong message is that today US assets are on a fire sale and it will not be long before the world's sovereign investment funds step in and buy out big US companies that badly need an infusion of funds not because they are bankrupt but because there is a liquidity crunch that will hamper their operations. To do this the medium of exchange will be US currency. The worst ever since the Great Depression current credit crisis will be tackled on three fronts. Monetary policy Fiscal policy and Economic policy Monetary policy means that the US will print unlimited money to combat the vaporization of assets that has taken place. That in itself is not a problem. It will not cause inflation because no money is being put in disposable channels. It is merely replacing money that has "disappeared" due to bad investments. I will talk about the fiscal measures that will be put in place as well as the recovering economic outlook expected before end 2009. Right now the world is in a recession, economy-wise. Mervyn you are unduly concerned about the US dollar. Not by a long measure is it going to be replaced or even significanlt depreciated. The US GDP is a father big enough to take care of that baby. Regards, Roland.