With the DOW falling by 31.79 points one would wonder, how will we see a 12,000 DOW by the end of the year?
The DOW only took a decrease towards the end of the trade day, when the consumerism reports came in weaker than expected. The belief, if people are spending less money will it equal the economy backsliding?
Granted we have a teeter totter economy but stability will happen, but only when money becomes more readily available. Currently, people have been using cash instead of credit to make purchases. This means people are not spending money like water any longer, but are holding onto their incomes tighter than before; disposable income no longer has meaning.
People are bracing themselves for the next down turn; which could happen if China decides to call our loan. If President Obama can persuade China to reevaluate the yuan (covered in a previous post originally titled The Yuan, The Yen, The Dollar and the Euro now titled What is the value of money), then this will allow us to become a competitor in exporting, or at the least, manufacturing things here as cheap as sending it to China.
As long as China keeps the yuan devalued then the U.S. and the countries using the euro will suffer the loss of exporting, and possibly lose ground in our perspective domestic markets.
On November 11, 2010 there will be another G20 meeting. Maybe persuasion will work when all leaders are together. But, at this point China will dominate in exportation as long as the yuan stays undervalued.
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