That could be the headline this summer. The weakening economy is continuing to drag the U.S. dollar with it. For the past 13 years, Americans have enjoyed a strong dollar. Now the tables have turned.
The U.S. dollar has been dwarfed by the Euro, which now costs U.S. $1.12 for every Euro $1. “This is only the tip of the iceberg,” says Noble DraKoln, Senior Currency Analyst of Liverpool Derivatives Group. With a $2 trillion dollar deficit looming on the horizon, Mr. Greenspan openly denouncing tax cuts, and the anti-climatic end to the Iraqi war, global faith in the dollar has disappeared. The dollar has the potential to sink further. ` A weak dollar has two stories. For manufacturers that rely on exports a weak dollar is a free pass to profits. The president of the National Association of Manufacturers has already expressed how happy he is with the situation. `On the other hand average U.S. citizens will find every day goods more expensive as well as foreign vacations unattainable. It isn’t unreasonable to expect that this will further negatively impact the airline industry. ` This U.S. dollar erosion also affects your investments. As the dollar gets weaker, foreign investors begin to pull out their money, first from stocks, then from bonds. This spiral downward could extend our recession by three to five years. Corporations have already begun to invest in currencies to protect themselves from the weakening dollar and foreign investor risk. Average investors could do the same, if they only knew how. ”
Noble DraKoln is the author of the best selling book Futures For
Small Speculators, available on http://www.amazon.com. He is a well-
known Southern California educator through his Small Speculators
investing seminars. He has been a futures investor, broker, and
analyst for almost 11 years. You can subscribe to his free monthly
newsletter at http://www.liverpoolgroup.com.
