05-23-06 - 1


The dollar is headed into the shitter as I predicted a while ago, but I just realized something funny about it. I anticipated the dollar's dive by moving a bunch of my investments overseas. Investments in foreign stocks, if they keep going up at say a 5% rate in their own currency will go up much faster in dollars a the dollar falls. The funny thing is that a falling dollar actually helps American industry and hurts most foreign industry. Most successful foreign businesses export to America, so a falling dollar makes their goods more expensive here which hurts their sales. On the other hand American exporters become more competetive overseas so the American companies actually do better. This trend works exactly against the exchange rate.

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old rants