Well, the JP Yen hit the 101 level versus the US dollar last week. I guess it is time to revise downward the US dollar in light of the vast consensus that markets will continue to put downward pressure on the greenback. With oil hitting $106 per tub and the US Congress unwilling to take on the Bush White House, you can understand how little confidence investors see the US economy getting better soon. Here are my next set of predictions:
US$: global markets will put an extreme amount of pressure on the dollar and let it fall to the 95 yen per dollar by spring 2009. The Euro will climb another 10-15% against the dollar as well.
November Elections: The Democratic Party will emerge with a strong mandate for change. They will take the White House and take both the House and the Senate. With control of both, world markets will both celebrate and worry. Celebrate in the sense that the US may withdraw its military forces overseas and try to make peace instead of war. And at the same time, the markets will worry that the US may begin to erect stronger barriers against foreign trade and take a more aggressive stance against the imbalance of trade.
EU: The global power balance shift will move away from the US and land on the doorstep of the EU. The men and women in Brussels face a daunting task: take a strong stance against the US and move more toward Eurasia and APAC or mainstain the status quo.
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