Saturday, November 17, 2007

Dollars

The Independent has one of its front-pages today on the dollar. Pretty superficial stuff, and I'm not sure whether I agree with the usually good Hamish McRae's argument that one reason for dollar weakness is declining US share of global GDP, which seems to me to be more a function of dollar weakness rather than its cause.

My own currency speculation, now up to something near $2,000, has obviously a negative return so far. It's going to get worse, probably, as McRae points out - even if the dollar is undervalued it can get more undervalued. I wouldn't say I was worried particularly as I've always valued the saving part of investment more than the return - an investment with a 10% negative return is still worth 90% more than if the money had been used for consumption.

Anyway I'm off to India to check out the rather more laggardly rising star of the economic world. Back Wednesday.

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