What happens to US Dollar-Euro exchange rate when German consumers go on strike in January 2007?
German economy is booming. People are buying washing machines, camera, refrigerators, computers, cars you name it. The buying is furious. The ECB is raising rates to hold stand against the inflation. However behind the scene something sinister is coming. All these crazy buying by the German consumers is because of the coming 3% increased in value added tax in Germany to be in effect in Janauary 2007. International thinks tanks now believe, in January 2007 the German consumers will go on strike. A vaccum in buying will collapse the German consumer side of the economy in the first half of 2007. The effect can be severe for Dollar-Euro exchange rate. The Dollar can sharply rise against Euro. Gold in terms of dollar can sharply fall. The stock markets will also fall triggered by abrupt Eurozone economic collapse.
