| Unknown News is a collection of one-sided commentaries, more of a blog if you can call it. But nevertheless Leon Fisher is correct of how the Dollar is performing really badly not just because of the trade imbalances but also Oil.
Most sales all around the world are conducted in US dollars because the US prints them, distributes them, despite the fact that many of them are weakened. So if the world sees a weakened dollar, instead of paying them in Dollars, they will shift to Euros so they can purchase oil and other commodities. Supply and Demand folks, remember that from Eco101???
With a weakened dollar, what does it bring? That is often disputed. It could bring about inflation. It could do the opposite. This is unforseeable just like the economic crash in Japan during the 1990's.
In addition the crisis in the MidEast, demand for Oil from China and India is rising. Fossil Fuels, like all resources in the world are becoming depleted. Fiscally, America is in deep trouble and will bleed itself dry if it does not find an alternative energy source FAST.
Like most Western industrialized nations, Energy runs America's economy, not trade. America is not a trading nation when NAFTA and other trade barriers such as heavy import duties, tarrifs, and other forms that contradicts free trade exists. Especially if America is a service-sector dominated economy. Remember that.
__________________  Cogito ergo sum |