The NYTimes reports Corporate liquid assets are $1.3 trillion, up 20% from the start of 2003. Reuters has a link
http://www.nytimes.com/reuters/business/business-markets-forex.html, which provides data on Dollar losses:
The dollar crumbled to $1.3460 per euro (EUR-), according to Reuters data, a decline of nearly 1.4 percent
Against the yen the dollar was off more than 1 percent to 102.07 (JPY-).
Against the Swiss franc the dollar fell 1.76 percent to a new 9-year low at 1.1302 francs (CHF-). The dollar also slid to new 9-year lows against a basket of currencies (.DXY).
Sterling was up 1 percent to $1.9436 (GBP-).
Both articles mention that Business investment has dropped, and is unlikely to increase dramatically in 2005. One article even made the remark that the Unemployment rate is actually low in historic terms. It was enough to make One nausous.
Corporations have a enormous Cash reserve which is depreciating in value. American Consumers will have to start paying much higher Prices for foreign Imports. Real Unemployment, if translated into those Who has lost Jobs since 2001 and increasing number of Adults coming of Age, stands at over twice the official numbers of 2.7 million. The professed rate of investment indicated in the Business poll in the Reuters article assures not the 200,000 monthly estimated Jobs for 2005, but more on the order of 112,000 Jobs created as were last November.
American Consumers will have to switch from foreign goods to domestic goods eventually. The fall of the Dollar highlights this fact. Now is the time for Corporations to alter their production schedules to supply domestic goods for the American market. They should start investment for domestic production immediately, before they lose a substantial amount of their investment capital through Dollar devaluation. lgl
No comments:
Post a Comment