> The capital flows which finance the deficit, rather than the deficit
> itself, are the key to the currency move, and they come from euroland
> and Japan in the main (we Brits put up quite a bit but have never
> managed to escape being a dollar proxy in the past).
>
> dd
the deficit was financed post-bubble almost entirely with short term dollar corporate obligations (and a very little bit of treasuries). as these mature the responsibles are moving to euro (& loonie) obligations. especially now with Snow's backing off the strong dollar mantra. therefore the currency move. will this not of itself lower euro (& loonie) interest rates?
john mage