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Falling Dollar and slowing US Economy

User techy246 from our now defunct economics forum posted this question that had a few responses. We’re reposting it here in the blog for your view.

1. Since Europe exports to usa a lot, how can they let their currency keep going up?….is it possible that they are not using USD as the currency of trade but EURO instead??

2. from everything i am reading, even though nothing is for sure right now, it looks like the USD is going to fall atleast 30-40%. and at the same time FED will have to decrease interest rate to support the slowing economy.

lets say slowing US economy leads to:
1. high unemployment, wage decrease
2. decreased consumer spending (leading to worse economic conditions)
3. lower interest rates (falling USD)
4. Slowing china/india economy because of decreased exports

in the previous downtime in 2001, they decreased the interest rate, and people kept spending by borrowing from the equity of their home….i wonder what will bail us out if things go south this time??

one more thing i am not able to understand, how can the stock market keep ignoring things??

isnt the analysts 10 times more knowledgeable than layman like me, or is it possible that all the doom reports are false??

i think if the economy starts to go down…..stock market will go down atleast 20%

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