[kingu]

Therefore, the $ is still down 20% and as long as the US has major deficit spending the euro will continue to beat the dollar.

Let us examine the CIA World Fact Book, 2005 Edition. Deficits, European Countries compared to United States...

The United States is #34 on the list of largest public debt vs GDP, 65% in fact. For the EU, we have ... #33 Germany. #31 France, #22 Turkey, #9 Italy, #8 Greece.

If massive deficit spending were an issue here, why would currency traders support a country that has 105% of their GDP tied up in public debt (Italy)? Or 112%, such as Greece?

Such talk in the financial pages is just yet another excuse to bash the US, but of course, we'll see yet another quote from the G8 summit with France, Italy and Japan complaining about the big deficits that the US is racking up. Oh, and Japan is #3 on the list with a whopping 164.3% of their GDP in public debt. I'm sure the currency traders will be wiping out the value of the Yen tomorrow.

Don't hold your breath.

[IronMan04]

Currency traders steeped in economic liberalism and thus have no political allegiance. Their only concern is to be holding the right currency at the right time.

For example Soros did not borrow ten billion pounds and then sell them for dollars, yen and marks to devastate the UK economy. Instead he did so because he knew the pound was overvalued and that it would soon have to be devalued.

And when he was shorting the dollar he did not do so to break the US economy. He did so to make a buck. CT's are the ultimate capitalists. They care nothing for Governments they are the anarchists.