This .pdf (accessible to laypersons) from the labor-backed Economic Policy Institute suggests that a falling dollar is probably very bad news for Europe.

The euro area is one of the slowest growing economic areas in the world, yet it will bear much of the burden of relieving the pressure of the U.S. trade deficits. This will deprive the euro area of demand for domestic products at a time when such demand is necessary to forestall a full-blown recession.

Via Marginal Revolution.
posted on Nov 28, 2004 - View this thread

The Fed is in a dangerous game with China : Chen Zhao, chief emerging markets strategist at Bank Credit Analyst Research Group, has written an article for The Financial Times, postulating that the Central Banks of the US and China are engaging in a massive reflation. When the reflation ends, however, the US may be in a world of hurt. Meanwhile, some members of the Bush administration are calling for china to let the $/Yuan exchange rate float. A prominent expert, however, expects China to continue to peg its currency. Others discuss the ramifications of a floating currency. Read yet another collection of links at the Library of Economics and Liberty.

What should happen to exchange rates? What will happen?
posted on Aug 1, 2003 - View this thread