| American Airlines another sign of Recession -- 4/6/2008 |
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American Airlines is a huge company so there should be no doubt in anyones mind that we are well into a recession now. There are now two airlines that have gone out of business and the majors are starting to cut back on costs. I would expect to see more airlines do the same. This will also have a trickle down effect on many other companies that do business with the airlines. If less people are travelling it means so many things. Vacation related business is slowing, travel websites, you name it. In analysis,
There is so much news about the falling dollar. It is obvious now that US exports are growing quickly. In addition, the EU inflation rate is far outpacing the US inflation rate. This is a double whammy because as the dollar falls in reference to the Euro, people can buy US products for cheaper than European products. In addition, the services industry really excels. Then, if European prices start to increase because of decreasing demand, the cycle repeats itself over and over and over. At some point the EU beaurocrats will wake up and realize that the weak dollar is hurting them and helping us. Let's hope for two things. One, that they do not realize it this year and we can extract much growth from it. Two, that our inflation stays low and the dollar decline does not accelerate. There is a certain level, around $2 USD to a 1 Euro that the dollar would be devalued too much and then international investment in the US would decline too much offsetting the increase in exports. For now however, it works way more in our favor. Get The Limit Order for $6.65/month with a 3 month membership. The Limit Order stock picks continue to outperform the market, Register for free and check it out. |
