A new protectionist trend has clearly appeared in the United States - but can Americans afford it? If the US tells its trading partners that their money is not welcome, they should be excused if they invest elsewhere. Because of its massive current-account deficit, the US must attract more than US$2 billion in foreign investments every day to keep the dollar from falling.
To illustrate why one should be concerned about a potential decline in the dollar, look at inflation: just about everything in the US has been getting more expensive, except for the goods that can be imported. As the dollar falls, inflation - and with it interest rates - may pick up significantly.
Full Article by Axel Merk
# posted by madthumbs @ 10:27 AM
