This post provides links to a number of thought-provoking articles I have read over the past few days that you may also find of interest.

• Fred Bergsten (Foreign Affairs): The dollar and the deficits: How Washington can prevent the next crisis, November 2009. If the US is serious about recovering from the global economic crisis, it must balance the budget, stimulate private saving, and embrace a declining dollar.

• Randall Forsyth (Barron’s): Weak dollar equals strong stocks, for now, October 14, 2009. As long as there is no ready substitute for the dollar, Wall Street can celebrate the currency’s steady decline. And U.S. GDP will be boosted by a cheap greenback’s spur to exports and deterrent to imports. This cannot go on forever, however. The dollar’s fall may not have started on President Obama’s watch, but it may become his problem.

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I thought it of interest to see what surveys of forecasters indicate about two questions being asked: Is a dollar collapse imminent -- Martin Wolf is skeptical, while others [0] are convinced the end is nigh -- and is a double dip recession likely? I take a look at the messages conveyed by FX4casts.com and the WSJ October survey of forecasters.

The Dollar

First, let's take a look at what a survey of approximately 50 banks and financial firms indicates, for the value of the dollar (Fed broad index) and the euro/dollar exchange rate.

Figure 1: Log dollar index (broad) (blue), mean forecast (red squares), high and low forecasts (95% bounds) (teal +). Forecast dates typically pertain to 4th Thursday in each month. NBER defined recessions shaded gray, assumes last recession ends 09Q2. Source: Federal Reserve via St. Louis Fed FRED II, FX4casts.com, NBER, ...

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Randall Forsyth (Barron’s): No bull! Rally hits the wall, August 19, 2009. Coming off a “sugar high,” stocks have stalled below the early August highs. Pause or correction?

• Brian Wesbury and Robert Stein (Forbes): This recovery is no sugar high, August 18, 2009. The way we see it, those who were pessimistic about stocks and the economy early this year are going through the classic five stages of grief. First, they denied a recovery was going to happen anytime soon. Then they lashed out with anger at those who spotted signs of the recovery. Now, they are bargaining, admitting the existence of the recovery that they did not see coming, but belittling it. Next, as things keep

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