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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (5525)1/19/2004 10:47:58 PM
From: t2  Read Replies (2) of 110194
 
What you are missing is that although they are collecting 4% on their money vs 0% in japan, the us currency is worthless. Eventually 4% of nothing is nothing.
I eggagerate but by how much?
You tell me

Currency of the only superpower in the world worthless? You got to be kidding. It is the huge military budgets that lead to the big deficits. It is the only the fact that world central banks had accepted the dollar as the only reserve currency that lead to the dollar's decline in the past couple of years. That correction will complete itself sooner or later.

You have to ask yourself, why is the BOJ now more aggressive than ever in buying dollars. Are they not worried?
Answer: Not as much as others..currency traders, other governments. There must be sound logic to the BOJ's strong stance.

It is the YEN that is becoming overvalued as a result of Japan printing money and converting it to other currencies. So many are expecting YEN to get stronger and break 100 (the consensus view); but I will probably take the other side of that bet..will probably seee 120 before 100.

Sort of reminds me of the consensus view over a year ago among all the experts that a weakening dollar was going to be very bad for the stock market.
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