Merrill Lynch Economist on Dollar Collapse: Not “Armageddon,” but Part of a “Global Rebalancing Process”
November 7th, 2007Well, I’m glad we’ve got that cleared up.
I’m also glad that I “rebalanced” my assets out of the U.S. a long time ago.
Via: Bloomberg:
The falling dollar is part of a “global rebalancing process” and isn’t cause for alarm, according to David Rosenberg, chief North American economist at Merrill Lynch & Co.
The dollar, which has dropped 30 percent against the euro in the past five years, reflects a correction of the U.S. currency’s overvaluation from 1997 to 2002, Rosenberg said in a research note dated Nov. 2. The dollar, measured by the Federal Reserve’s trade-weighted index, is little changed compared with its value a decade ago, he said.
“The dollar is no lower today than it was in 1997 — we don’t remember that being a particular Armageddon-type time period,” Rosenberg said. “Far from being a disturbing development, the dollar’s decline is part and parcel of the global rebalancing process.”
Why do I have an image in my mind of Kevin Bacon’s character in the movie Animal House bunching up his fists and screaming, “All is we-e-e-ell!!”
HA! He makes it sound like good news! Well, heck, if you can bullshit that well, you deserve the 7-figure salary he probably makes. It takes a real gift!
I always get suspicious when people like this have to come out and say that things are OK. Much like the CEO of a finance company reporting that everything is fine and encouraging investment a few days before filing for bankruptcy.
That Merrill comment falls under the category of never believe a rumor until it has been officially denied. “Not Armegeddon,” (from his lips to God’s ear) pretty much insures that folks with any dollar holdings ought be very worried. And then the following thought crosses my mind, why should anyone believe anyone from Merrill, a brokerage that has been right in the thick of perhaps the most corrupt financial environment in U.S. history.
http://www.theage.com.au/news/business/sharemarket-and-dollar-take-a-dive/2007/11/08/1194329412772.html
“Tolhurst strategist Tony Farnham said investors had to bide their time. But the global economy was strong and even a US recession would probably not tip it over the edge.”