Following list gives the most important indicators for the
future of a currency: - Current account balance of the country -
Total national debt of the country - Inflation rate - Interest
rate The larger the national debt of the country, the more
expensive it will be to sell debt to foreigners. The government
will then be obliged to monetize this debt to keep interest
rates low and to be able to service this debt. Rising debt load
will therefore devalue the currency. The higher the inflation
rate, the lower the currency will go. An example is Vietnam,
where the dong lost much of its value due to high inflation.
When interest rates are lower than the inflation rate, there is
no incentive for foreigners to buy the currency. There is no
incentive to save money. The consequence is a lower currency
value. Let's look at the current statistics: 1) Current account
5 months ago, the current account deficit of the US was in the
order of $US 110 billion per quarter, which amounted to $US 450
billion per year (2011). For