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The risks of a falling U.S. dollar and rising mortgage rates.

Normally this would not be such a bad thing, because it makes our exports cheaper and our imports more expensive, thus reducing the trade deficit. But a fall in the dollar could set off a spike in long-term interest rates here, including mortgage rates, which could burst the housing bubble. It could also cause the Federal Reserve to raise short-term interest rates more than it should, since rising import prices add to inflation. This would also slow the economy.

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Read more from this blogger: http://evansmediausa.blog.com/Economic Forecast - 2006