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SirMoby, what americans don't seem to realize is that short term, a dropping dollar helps to prop up your internal economy by making is possible to manufacture things in country that you use to get from other places. It creates a bunch of bottom feeder assembly line jobs.
Except: China wisely pinned it's exchange rate hard to the US dollar, so no matter what happens, the cost of chinese produced goods remains the same. They will always have a manpower cost advantage (and few OHSA style rules), so there is less job shift.
As a result: The costs of many imported goods goes up over time, creating an undertow of inflation, all the while the internal economy is creating nothing but cheap ass bottom feeder minimum wage jobs, so the actual average buying power in the economy goes down, as does the realtive standard of living when compared to other countries. The value of all american assets (housing, business, whatever) drops in relative terms.
5 years ago, 100,000 US would get you about 165,000 canadian. Now 100,000 US gets you 109,000 canadian. If you took US dollars and invested in Canadian value stocks, you have made a huge net return (on the intial 100k, you would be holding over 150k us right now not including any growth or interest... 10% shift per year average in 5 years).
Combine that with a decent investment strategy, and you could be up net 100% in 5 years without a blink. Meanwhile, net net, you US based property has dropped probably 30% in relative value... the gap is something like 130-150% in five years.
That kind of shift of value and net worth is a significant indicator of what will happen in the next 5 years. Some are talking 2 us dollars for a Euro.
Alex
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