Can Dollar crash now? What is the effect on world stock markets and economies?
Jaren Zuba
Mar. 18, 2007

A drop below 78 in dollar index can create a massive wave of selling pressure. If Euro can cross $1.50 mark to one euro, the European currency will reach $2.00 very fast. That will crash the dollar. The dollar index will fall to 65 level – unprecedented.

That will create a massive financial meltdown in the world economies. The exporters to US will go bankrupt. Japan and China will be worst hit. Indian outsourcing industry will end its existence. The Asian exporters will face massive depression.

The scenario for dollar is bad for the short to intermediate term and very bullish on the long term. As the US economy realizes the stealth deflation in the economy, it will create massive gyration within the financial system. Once the Federal Reserve signals a rate cut, dollar collapse in a very violent way. The last thing the currency markets are expecting is a real deflationary recession or depression in the economy. The negative savings rate will finally come to an end. The effect on the stock markets worldwide will be severely negative. The world stock markets can gap open several weeks limit down not letting the individual investors get out of the market.

Can Dollar crash now? What is the effect on world stock markets and economies?
Jaren Zuba
That will create a massive financial meltdown in the world economies. The exporters to US will go bankrupt. Japan and China will be worst hit. Indian outsourcing industry will end its existence.
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