Declining dollar- effect on our economy

ved · Telugu Veera Joined: 26 Feb 2006 Posts: 2003

The recent cut in interest rates by US Federal reserve board creates more problems for Indian exporters, including the giant software industry. With cut in interest rates, I predict rapid exit by investors from US treasuries and other dollar denominated investments, resulting in glut of dollars in the market. It may calm down the credit and sub-prime mortgage industry in US, but it will decline the value of dollar further. How much the rupee is pegged to this decline to be in tandem with dollar is anybodys guess. But the sentiment is that rupee will continue its raise against dollar. This will ultimately result in lowering of salaries across the board or stop any more raises for 2008. On positive side, we can import more goods from US at cheaper price. Your thoughts?

Stalinist · Posted: Wed Sep 19, 2007 5:17 pm Post subject:

We should feel happy if American Empire faces economic problems. Exported commodities from America also become cheap in international market and American exporters get low profits.
_________________

ciry · Posted: Tue Sep 25, 2007 4:00 am Post subject:

The projects which we r getting r almost from US only. If its economy decline and they get less profits even we have to face problems.

Stalinist · Posted: Tue Sep 25, 2007 5:21 am Post subject:

Economy should not depend much upon foreign exports and imports. Read economics of David Ricardo who was one of the pre-Marxist economists.
_________________