And if the US Dollar crashes soon, what will happen next ?
This weekend, the business week has a nice discussion on this topic.
To me, I am thinking:
- a little crashing is good for the market now since the economy may be improved as a result
- Crashing too much, let's say 2 dollars equals 1 euro, then it's bad for all people in the US since the living cost will be dragged up
- The US dollar crashing may cause the interest rate shoot up so that inflations are not in a bad shape
- As a result, if the interest rate up, housing market will go down again. Financial system will be in trouble again and the US economy as a whole overall will follow. That's some bears are hoping now.
- So look closely at the US dollar and the interest rate, some clues could be drawn from them on the market development.
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