Quote:
Originally Posted by Mon
My rationale for leaving money in USD is that the usd has dropped tremendously and has never been this low (to my knowledge) and due to current circumstances with economy may stay low for some time. However once economy picks up, sub-prime market corrects itself, new president etc etc the currency will bounce back to it's 'normal' rate. I know you'll say this is speculation (and I agree it is) but do you really think the usd falling is a permanent trend or just a short -term drop?
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The US financial system is in a pit. The current account balance is at record highs. In simple economic terms it is not possible to sustain such a CAB for so long without a massive slow down in the economy.
In laymens terms if you have debt, at some point you must pay that debt off. This means less money for discretionary spending(investment). The worrying thing is that Im not sure when the US can do this, it is heavily involved internationally in wars, and war has traditionally been an extremely expensive exercise.
Good luck with our speculation, I hope you are ready to hold for a long long time
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