>So, lower dollar means:
> --improving balance of trade (cause exports are cheaper?)
Over time. It takes a while for trade to respond to currency changes. And since currency values can change instantly, for a while the trade balance could worsen - the notorious J-curve effect (dollar decline = cheaper exports and more expensive imports, but if volumes are unchanged, exports decline in value and imports rise).
> --debt becomes less expensive
>but
> --capital flight to more valuable currencies
> --increased interest rates to halt capital flight
> --therefore, possibly strangling the economy into deflationary crisis?
Yup, that's the risk. And Hyman even mentioned it.
Doug