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Technology Stocks : BORL: Time to BUY!
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To: Bipin Prasad who wrote (7716)11/24/1997 8:27:00 PM
From: Punko   of 10836
 
Off topic

>> Economists: Asia's woes won't hurt U.S.

Like most things, that depends on whom you talk to or what questions you ask. Many of those same Economists are quick to point out that the Far East (Japan in particular) finances a tremendous share of the US national debt. The health of the Japanese financial markets and institutions is crucial to the US. A collapse would cause a panic among those holders of US debt. And if they decided to start dumping those treasuries to raise cash...what will that do to our interest rates? What would that in turn do to the cost of capital that this country's growth is so dependent on? Inflation? The attractiveness of bonds and treasuries relative to risky stocks?

Forget about the financial institutions...East Asian currency collapses would accomplish the same thing as more of these countries put the brakes on imports and pumped up exports as a way to bring more cash into their economies. Result in US: More imports of cheaper goods, fewer exports, more debt -- meaning higher interest rates.

Let's hope that what we've seen thus far is a weak outfit being shaken out and not the beginning of a trend.

I for one, am taking this opportunity to raise some cash. East Asia is not Mexico. Trade with those countries is of far greater magnitude. Like it or not, US economic health is intimately tied to theirs - maybe not in the short term, but a prolonged East-Asian depression would definitely be felt here before long.
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