Quote:
Originally Posted by Emil
What a surprise... :P
Obama wanted to look good for the upcoming election and they also had to do something to raise the dollar a bit.
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For the dollar, you can explain it with the european central bank:
They have a policy to stop inflation, so each time there is inflation ,they increase their rate to lend money.
In the usa, obama, from the democratic party, needs the vote of the last workers.
I think this is also linked with the debt of the USA.
In the first case, Obama keeps the dollar weak to improve the possibility to export goods (cars/airplanes) to other countries at a low price and in the second case, i heard that it reduces the interrest that USA has to pay because of its debt.
The problem is that now, you can borrow money at a low price in the USA and lend it in europe at a higher interest rate.
But i guess that the dollar will stay weak until the end of 2012.
This means also that it will reduce the purchasing power of the americans... (inflation, because you have to import good from other countries, like japan ou china).
Of course, this may change if the euro becomes weaker because of the debt of some european countries.
Let me know if i write something wrong.