Friday, December 10, 2004


Dr. Richebächer and the USD

In an very good article at The Daily Reckoning, Dr. Kurt Richebächer doubts in A NEW ILLUSION: THE FALLING DOLLAR that a falling dollar will solve our trade deficit problem. I was amazed at the statistics he has about our debt buildup today vs the last time we had a falling dollar that eased our trade deficit problem, 1989-1993.
During the four years 1989-93, total credit in the United States - financial and nonfinancial - grew by a cumulative $3,255 billion, or $819 billion per year. In flagrant contrast, during the four years to mid-2004, overall credit grew virtually three times as fast, by $2.4 trillion per year, and there is no letup in sight.
Now those numbers just astound me; $2.4 trillion new credit per year!
Mover Mike

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