The last couple of gigantic credit bubble bursts saw the senior currency rise in strength for at least one to two years after the contraction starts. The US$ seems to be right on track for this to play out for another year or so. This credit destruction looks to be at least $50T in size, which far out wieghs the $3T plus so far being pumped in. Deflation and a strong US$ will probably last a lot longer than most people think. As unemployment rises and credit continues to be constricted around the world, there will be more demand destruction. All these factors and historic evidence point towards this scenario lasting for a minimum of one to two more years. Perhaps a lot longer.
