Lok Sang Ho

Another Look at 3Q 2008 GDP

The strength of the US dollar is eroding American competitiveness at a time when foreign demand is ebbing. When weakness in the external sector combines with weakness in domestic demand, the prospect is for a dramatic decline in US GDP in the fourth quarter. I have not the slightest doubt about it.

There is imperative to prevent the US dollar from gaining further strength. However, I do want to see the US dollar weaken against the yen, whose strength is threatening the health of Japan's export sector and the wider economy too. US and Japan are the world's biggest two economies. Their demise will have serious repercussions throughout the world.