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NOW THE FAMINE?

May 30, 2003

You’ve heard the addage: it’s either feast or famine. It was Joseph of OT fame who saw the coming famine. Is there a Joseph in the house today? Do we need one?
The US$ has just ended a seven year run. Since 1995 it has increased more than 40% and every foreigner wanted to party with the US$. The party (shall we call it a feast or more of a drunken orge?) is over. You hear that? Everyone go home, there is no more alcohol! We’ve had foreigners paying for our little bash recently to the tune of $1.5B a DAY! Yep, that’s what our annual trade deficit has been. In January of this year (just 5 months ago) the US$ topped out. The US$ stood atop the currency hill at 120 back in January. Today, it dropped below 111 before closing a tad over.
The US$ has been the government and the consumers “no-limit” credit card. The card-holders now want to be paid. Just how far and how fast the US$ falls will dertermine the severity of the hang-over. Will a seven year famine follow the seven year orge?
God, I hope not, but we’re definitely in need of a bottle of extra-strength Tylenol! Make that a case!

Written by Ernie · Filed Under Daily Commentary 

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