Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.



I think Todd and I are stranded on the same island.

A weaker dollar helps U.S. exporters only if there is someone to export to. Every country is struggling to devalue their currencies to spur their economies. That tells us that overcapacity is still the problem.

But the U.S. is in a particular fix. Our economy is highly dependent on the consumer, and the highly leveraged consumer is dependent on low interest rates as supplied by foreign investment.

A lower dollar hurts the consumer by making import prices higher. More importantly, a lower and lower dollar signals that foreigners are less prone to invest in financial assets of the U.S. The latest figures show that foreign buying of U.S. financial assets has slowed to $4 billion in September from $49 billion the previous month. That is the worst month of inflows since the autumn 1998 (LTCM crisis) and worse than anything we saw in the aftermath of 9/11.

I remain focused on the dollar. The real trouble begins when (if) it begins to affect the U.S. bond market. It hasn't yet.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos