Wall Street may have pinged its collective red braces in glee when Dubya was reinstated, but the rest of the world had better start watching the pennies.
Today, the dollar slumped to a new record low against the Euro, breaching the essential plumb line of $1.30.
Americaï¿½s trade deficit ï¿½ already in excess of $50 billion ï¿½ continues to slump: a fleeting matter for Junior, but a fairly pressing issue for the rest of the world.
Todayï¿½s record low is the fourth month in a row that the dollar has slipped. Combined with a rise in oil prices of more than two-thirds this year alone, thereï¿½s a lot of worried macro-economists losing serious amounts of sleep tonight.
Ah, but why should we care? Well, for those of us fond of sleeping under a roof and eating two or three times a day, a weak dollar means the increased isolation of American import, which in turn, is a considerable blow to the rest of the worldï¿½s export trade.
European Central Bank president Jean-Claude Trichet recently expressed concern about the impact of a weak dollar on European competitiveness describing the rise of the value of the euro as “brutal” ï¿½ and if Trichet says itï¿½s brutal, it probably is. You donï¿½t get to be president of the ECB if you get a bit shaky about your share prices dipping slightly.
One of the major elements of Juniorï¿½s campaign ï¿½ indeed, the issue which many would argue won him key manufacturing states ï¿½ was his promise to tackle Americaï¿½s spiralling trade deficit.
However, having spent four years doing bugger all about it, perhaps itï¿½s time somebody pointed out that itï¿½s hardly likely to be a trend reversed overnight.
In the meantime, European trade had better start looking at that lucrative Inuit marketï¿½