re: warren buffett - petre- are you assuming that exchange rates...

re: warren buffett - petre- are you assuming that exchange rates reflect unltimately the trade imbalance and move towards equilibrium?

IMO the crux of the problem for the US is that forex markets are many times larger than the real value of imports and exports, and if they worked as they should in reality then the dollar would have declined long ago to move towards balance, but speculation and interest rate differentials effect the prices in the forex market to a greater degree than the transfer of real goods and services.

I think his point is that IC's would aid what you say, but that it will take some time and history tells us that forex markets dont act as eco 101 tells us they should - otherwise all economists would be rich. :-)

pb