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The simple fact is that the US acknowledged debt is very close to if not already equal to its GDP.

When that happens your currency joins the ranks of the Turkish and Italian lira.

A weak dollar leads to a tightening of the money supply because a higher interest rate must be paid to those who would buy treasuries. Why would anyone loan you money at a rate less than a treasury?? Answer: They won't. So less money will be sought after for loans because the cost of borrowing goes up.

A weak dollar does not cause inflation. Inflation is a result of a weakened dollar. If it now takes $1.30 to purchase the same thing from Europe that you bought for .90 cents a couple of years ago then you can see how it takes more dollars to buy the same thing. That is inflation.

A currency's prime rate is a direct reflection of the purchasing power of the currency. If the rate is low, the currency will buy a lot. If the rate is high, the currency will buy less.

The dollar is going down the tubes. The final over the cliff plunge will occur in about four years. The smart money is positioning for this now. It will only get worse.

the inflation arises not because a swiss chocolate bar which cost one euro went from $0.80 to $1.30 in two years, but because Hershey's US made bar, which used to sell for $0.99 now sells it for $1.19 since the swiss competition is so much more expensive now, the market will absorb the increase.

actually, i think the foreign money has nowhere else to go. french and german innovation? pour more money into china to build yet another steel plant? pour money into India?

just wait for the nano-technology boom to hit -- the US will be the leader of that wave as well...

Nobody trades money out 4 years in advance - there is no "smart money getting out now." If countries like Russia and the EU start play politics with the dollar they will just get burned in the end. If you could defeat a nation with currency maniplulation then war would have passed away long ago. this is all nonsense. China will be forced to unpeg the dollar. things will be just fine - this is just more rhetoric against Bush by perpetrated by the usual subject. In truth, if globalism continues at the current pace, eventually their will be a basket of currencies used as a reserve. You figure about the GDP is meaningless when you consider the fact that we double our GDP every 15 years. People were saying the same thing in the 80's and they were wrong then. Notice that we did not hear this story line until after Bush won. this is the latest tack. Just where are they going to go long term? The Euro? Right now people are closing out positions taken during the election. Notice the sources that they get to ponder this. Have you even heard of 90% of them? It is just more leftist rubbish. If things are so bad why is the market doing so well? Incremental tax cuts over the next four years, tort and regulatory reform and there will be another huge boom.

It is abolutley silly to think that the dallor is going the way of the Turkish currency. Wher on earth will the money go. CHina will most likely hit a high water mark in a vouple of years and then steel down to work out their problems. We heard all if this before during the Reagan years (remember we devalues 40+% against the DM back then.) It was rubbish then and it is rubbish now.

A weak dollar leads to a tightening of the money supply because a higher interest rate must be paid to those who would buy treasuries. Why would anyone loan you money at a rate less than a treasury?? Answer: They won't. So less money will be sought after for loans because the cost of borrowing goes up.

OK, lets follow this logic a bit more... China and Japan have a huge amount of dollars because of our trade imbalance with them. What are they going to do with them? They are caught in as big a bind as we are. For sure they're not going buy Euros - they'll immediately lose 40% from a couple of years ago. What would you do in their shoes?

Would you just sit on them?

Would you keep buying treasuries and at leat get some minimal interest?

Would you buy stocks and bonds in american companies?

Would you start buying hard assets in the US, such as real estate?