[Tennessean4Bush]

...until they have a reasonable expectation that the currency valuation has stabilized.

Stabilized? Define stabilized. I have never seen it stabilized. It always fluctuates. It bubbles up, it bubbles down. Do you mean in a certain range and within specific tolerances? If so, what exactly are the tolerances you think are necessary for industry or foreign capital projects to locate in the US? I am eager to read your pronouncement.

[ARCADIA]

Define stabilized.

You need to have a currency that will hold within a given range. If the dollar is likely to hold at year 2000 less 10-20% over the next couple of years then you can begin to build a business case based on that assumption. If it simply goes into free fall you are in trouble. Each percentage of drop means that your US domestic demand can be significantly impacted, that banks and other creditors may become insolvent, that the political balance may shift against you, that other countries may further insulate themselves from US exports, and so on....

In some parts of Latin America it is not unusual to see wages, rents and pricing negotiated on a weekly/daily basis. That is not the kind of environment that would attract alot of investment. The usual result is capital flight to safer currencies.

[XBob]

308 - "Stabilized? Define stabilized. I have never seen it stabilized. It always fluctuates."

You are too young. It was quite stable in the 50's, 60's, and early 70's, until Nixon took us off the gold standard and let everything 'float'. We had a great economy and great low interest rates and stable prices, and low taxes, and a man with one job could support a wife and family.

Getting off the gold standard has blown stability out of the water.