THE "AMERICAN PESO" CONTINUES TO DROP LIKE A ROTTEN COCONUT IN SOME BANANA REPUBLIC, AND THE AMERICAN CONSUMER WILL SOON FEEL THE PAIN...
THE DOLLAR SEEMS TO BE HEADING FOR 150 ON THE EURO...AND SINCE THE MASSIVE TRADE DEFICITS ARE NOW "STRUCTURAL" THE BOTTOM IS NO WHERE IN SIGHT...
I COULD SEE THE DOLLAR AT 200 ON THE EURO IN A COUPLE OF YEARS...ESPECIALLY IF THE QUAGMIRE IN THE MIDDLE EAST DEEPENS...AND THE US IS ENGAGED IN ALL OUT WAR WITH THE NATIONS OF ISLAM...IN IRAQ, IRAN AND PROBABLY EVENTUALLY IN PAKISTAN.
THE PROBLEM WITH BERNANKE'S MOVE IS THAT LIQUIDITY IS NOT THE PROBLEM... HYPER-LIQUIDITY IS THE PROBLEM...
IF YOU HAVE A HYPER LIQUIDITY CRASH IN THE CURRENCY...ASSETS DEPRECIATE FASTER THAN THE DEBTS THAT THEY ARE SECURED BY...AND THE PHENOMENON OF "NEGATIVE EQUITY" OCCURS...
IT'S IN HOUSING NOW...BUT IT WILL SPREAD TO STOCKS, BONDS AND OTHER ASSET CLASSES.
THE TRANSLATION OF ALL THIS IS THAT WE'RE SCREWED... LETTING WALL STREET SPECULATORS RUN THE US ECONOMY HAS RESULTED IN THE PREDICTABLE DISASTERS THAT WILL NOW SURELY COME.
