Impact of dollar decline?
Source Eugene Coyle
Date 04/11/23/19:47

Reading about the dollar's decline leads to this speculation.

The dollar slides.

Consumer prices rise as imports get more expensive.

A second rise in consumer prices comes from revaluation of China's currency.

Interest rates rise as the old guard tries to choke inflation by
tightening money.

Interest rates also rise to defend the dollar.

Federal budget is tightened to defend the dollar.

Supply-siders are nowhere to be seen.

Jobs are lost -- much faster than rising exports plus substition of
domestic for imported products offsets with new jobs.

Loss of jobs and rising interest rates punctures the housing bubble.

Residential construction drops sharply.

Recession, which deepens as the above plays out.  Recession obvious by
April 2005.

Bush gets more aggressive internationally (Wag The Dog) as his approval
ratings plummet.

World-wide economic troubles deepen as USA engine parks.

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