I'd guess that the reason why the dollar is relatively high of late (even though it's down compared to the start of the decade) is because it's not just the US that's in trouble. In fact, the US$ (along with the Yen) are seen as save havens. I guess that the euro doesn't look good as a safe haven given the way in which euro-zone finance ministers have a hard time getting their collective act in gear.
As for a dollar bubble, it's possible. But its popping is only a big problem if it's based on debt accumulation. On Fri, Oct 24, 2008 at 6:02 AM, ken hanly <[EMAIL PROTECTED]> wrote: > As I understand it one of the reasons that the US dollar is so strong right > now is that there are many loans being paid off that were in US dollars and > that has meant that a lot of dollars are being purchased to pay them. This > results in a higher dollar. Commentators speak of the dollar being > overbought. Is there any objective way of telling if something is overbought. > Intuitively if the demand for dollars is increased because of loan repayments > or because for some reason investors see the dollar as a safe haven it would > be "natural" for the value of the dollar to increase. > Isn't this situation likely to create something like a dollar bubble in > which eventually the value of the dollar will crash? > > Cheers, k hanly > > Blog: http://kenthink7.blogspot.com/index.html > Blog: http://kencan7.blogspot.com/index.html > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Jim Devine / "Nobody told me there'd be days like these / Strange days indeed -- most peculiar, mama." -- JL. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
