9/12/2008

The Current Issue of the Depreciating Dollar

When the energy revolution comes, where would we be with a strong dollar? All of the experts on CNBC are always telling us how good the weak dollar is for exports. That weak dollar, which most everyone is hoping will strengthen, will continue to disappoint. There is a lot of talk about a strong-dollar policy, but no real actions are being taken to achieve that end. The interesting thing to note here is that there really are no actions that can be taken to strengthen the dollar. The policy makers are boxed in, as noted by many who discourse on the subject.

There is a similar boxing-in that has occurred in the national real estate market. Month after month we hear of new government bailout plans and projections of a "floor under housing." All the while, the housing-sector collapse accelerates. The best thing to do now is to look objectively at what is actually transpiring, rather than fixating on what government officials and experts claim is going to happen. They will continue to talk of the bottom of the housing market and the reversal in the dollar while both continue to get crushed. In 2012 when the median house in the US costs $60,000 and the average hourly wage is $7.00 we'll all be joyfully building wind turbines and solar arrays for what feels like minimum wage but buys us a nice little house with a picket fence, a dog and a cat, writes American John McIntyre

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