My job is financial forecasting. The company I work for is big enough to be a reasonable barometer of world economic markets. The currency trends have mirrored almost perfectly the economic ones-the US went into recession about 6 months ago (regardless of what the BEA says). Europe has gone into the tank in the last few months. The currency movements are predictive for what you will soon see in GDP, and it ain’t going to be pretty on either side of the Atlantic.
That said, this stuff about the dollar falling 50-90% are nonsense…It’s as simple as the old big mac index…A big Mac ain’t going to be 10 times as expensive in China in U.S. dollar terms as it is today. PPP is a powerful force, and you won’t see my salary in yuan being identical to a Chinese assembly line worker any time in my lifetime. I’d be surprised if we don’t see significant dollar depreciation given we’ll have to inflate our way out of debt, but it won’t be of that magnitude.
