SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Skeeter Bug who wrote (7743)9/6/1998 7:31:00 PM
From: Gersh Avery   of 42834
 
Hi Skeeter .. saw your question about bond dumping ..

Thought I'd through in my $.02 worth.

The coin that has to be used to bail out the Japanese banks is yen. The bonds are denoted in dollars. If the Japanese decide to use public funds to bail out the banks then there will almost have to be a bond redemption to do so. The proceeds of which will be converted to yen. Net effect will be a sharp change in the dollar/yen exchange rate.

Dumping dollars on the world market will cause foreign investors in the US stock markets to perceive a loss thereby giving them a motive to pull their chips off the US stock table. It won't matter if the DOW is up or down .. it will be a loss to then either way.

Internally, here in the US, as the stock market has fell investors have pulled out money from the stock market and transferred that money to bonds. With the drop in the value of the bonds the cash that had been put into a "safe haven" will have partially vaporized.. If, at that time, they decide to move the money back to stocks there will be less money to move back.. In addition bonds will look to be a better bargain than stocks, which will motivate people to move there.

All of the above means that stocks will take a hit, bonds will take a hit .. no place left to hide.

Didn't people snicker about Buffette buying silver?

Gersh
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News