Reply #37: dollar's value [View All]

Thanks for posting this excellent doc.

Dollar's fall will attract more foreign investments and pull back
of US investments from oversea, not only to buy T bills but also
the Wallstreet, that help keeping the equity market from being bought cheap and out of the street. So capital growes along with employment.

It may increase pressure of inflation from imports and growth of exports. However, if the constant cost and the flexible cost of imports are higher the benefits of extra exports then the trade deficits are more widen. Within few years, Japan and Europe may have to adjust their exchange rate to protect their jobs and market. So it is just a short term cycle of economy.

Warren Buffet has invented a better idea of trade coupons and that will help but still in the closet's white paper.
The dollar's fall is unavoidable in the long term of 20 years span or more because of US incapacity of competition in the global economy with many countries. However, Jap can have surplus trade with China and the rest of the world, so their theory and application of supply and demand chain management are correct and smarter, no job exports, no anti-inflation by unemployment, no emerging domestic economy...