Will weak dollar bubble trigger global inflation?

Will weak dollar bubble trigger global inflation?
Oct 17, 2007 23:20
DREAMLIFE Points: Join Date: Sep 5, 2007 Status: offline	Since the Fed cut the interest rate by 50 basis points, the stocks have all performed very well. The Dows and S&P are creating new records. However, dollar keeps depreciating. As we know, the currency's depreciation may cause inflation. In order to recover from the property bubble, US might tolerate inflation. Perhaps, the property bubble can be eased by doing so. Whereas, dollar's depreciation may trigger another bubble. US's weak dollar policy surely causes a dynanmic response to other nations, which may trigger global inflation. Many nations want weak money policies to protect their industries. Thus, they have to expand their currency supplies to maintain their low currencies. If more and more countries adopt the weak currency policy, global inflation will accelerate. What are your opinions on this issue? Do you think that global inflation will occur?

Oct 17, 2007 23:20

DREAMLIFE
Points:
Join Date: Sep 5, 2007
Status: offline

Since the Fed cut the interest rate by 50 basis points, the stocks have all performed very well. The Dows and S&P are creating new records. However, dollar keeps depreciating. As we know, the currency's depreciation may cause inflation. In order to recover from the property bubble, US might tolerate inflation. Perhaps, the property bubble can be eased by doing so. Whereas, dollar's depreciation may trigger another bubble.

US's weak dollar policy surely causes a dynanmic response to other nations, which may trigger global inflation. Many nations want weak money policies to protect their industries. Thus, they have to expand their currency supplies to maintain their low currencies. If more and more countries adopt the weak currency policy, global inflation will accelerate.

What are your opinions on this issue? Do you think that global inflation will occur?

Oct 23, 2007 21:21	#1
ICEBERG Points: Join Date: Sep 10, 2007 Status: Offline	Perhaps, those foreign owners of US treasuries should sell to push up US bond. In this way, it can help US dollar remain stable. The news said that Japan had decreased its holdings of US treasuries sharply. The data suggests that China has also reduced its US bond.

Oct 25, 2007 11:36	#2
APAULT Points: Join Date: Mar 11, 2006 Status: Offline	I don't see how selling bonds will push up their price. If sales increase, prices will tend to be lower.

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