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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (8101)2/14/2004 11:36:58 AM
From: russwinter  Read Replies (1) of 110194
 
This NT piece is really steeped in contradictions and fuzzy thinking. On the one hand they nail down many of the core threats, and then just dismiss it as down the road, irrelative or papered over by phony CPI reports heavily weighted to "owners’ equivalent rent".

My thinking now is that China, and Korea will move first to delink their currency peg to the USD. Then Japan will follow. This is urgent now because of the enormous input price pressure coming to bear.
Message 19792759
Message 19804190
They will need to be able to secure scarce input at the lowest possible price in USD terms during the upcoming "price rationing" phase. Unfortunately, this will only be a temporary balm, so I see a chain reaction of incremental currency steps. The impact on the US will highly inflationary, and will cause large interest rate spikes as the Asians "take a holiday" from their aggressive interventions. My sense is that depegging is a only few months, if not only a few weeks away. The final catalyst and thus critical reason to act (to secure supplies at the lowest price in local currency terms) , may be an oil spike caused by the Venz. situation.
Message 19802301
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