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by Ashraf Laidi
Posted: Feb 20, 2010 5:00
Comments: 30765
Posted: Feb 20, 2010 5:00
Comments: 30765
Forum Topic:
EUR
Discuss EUR in this thread
We are living through The Great Experiment
So IMO this is going to be a huge roller coaster over the next months
US GDP expectations of 3%+ in 2nd half are crashing down.
If the US also comes up with sub 1% GDP growth, then whats the difference between Eurozone and the US?
This is the turning point for the Dollar - fasten your seat belts
A fiscal stimulus is key for the faltering US economy and this is not going to happen due to the US political scene. With a fallling stock market and faltering employment figures, the US consumer along with the firms will cut back resulting in a sharp drop in consumption.
Only way out is a fiscal or monetary stimulus. Get ready for the Bernanke printing machine and a sharp drop in the Dollar and the equities.
This is a classic out of 2008.
Europe and the rest of the world were rebuking the US policy makers for its recession and "deleveraging" was in. Come 2010 and every thought that trashing Greece and Europe is great while the US and China can sail away. But the correction in the Euro has been a prelude to what was coming for the rest of the world. Everone is connected and growth cannot take place in isolation.
The only out of this is by printing money - and the US, Japan will take the lead. Since these central banks and their citizen are most used to printing money.