Protection from a Falling Dollar

Merrill Lynch's Jesper Koll argues that Japan, China, and Europe must focus on domestic growth and beat the U.S. at its own game

Growing numbers of analysts and economists worldwide are trying to forecast the fate of financial markets based on predictions about what will happen to economies. Unfortunately, much of this may very well be a waste of time. Often it isn't what's happening to economies that explains financial markets. Rather, what's happening to financial markets is an indicator of what will happen to economies. Specifically in 2006, the issue is not whether the economic recoveries in China, Japan, or Europe warrant a stronger yuan, yen, or euro, but whether enough has been done to cushion against a collapse of the dollar.

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