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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: BGR who wrote (49278)6/24/1999 2:27:00 PM
From: per strandberg  Read Replies (2) of 86076
 
BGR,

there is no rampant run off in inflation on a national level

How could there be inflation when the Dollar is appreciating
and imports are increasing?

A couple of years ago a Dollar was 6.9 SEK, now 8.45.
The Euro has lost 10% in 6 months, the Brazilean Real about 25% etc.

The rest of the world has been on the verge of deflation.

The US imports have risen much faster than the exports thus transforming inflation into a trade gap of 20% of the export value.
The rest of the world is cheering, using the US for their colonial
strategy of "We produce, you consume". Most countries are trying hard
to depress their own currency to keep this happy state.
E.g. BOE, who is trying to bring the Pound down by selling gold,
as it cannot outright devalue because of the other Euro allies.

The irony is that the FEDs can't even force down the Dollar by printing, as the BOJ will step in and start buying Dollars to keep
it propped up, regardless of what this will do to inflation in Japan.

Raising rates will only increase the strength of the Dollar.

I find it strange that everybody seems to be so happy with inflation
(or the lack of it) when there is this growing trade gap to worry about. Closing it will demand a weaker Dollar and then the inflation
will return with a vengeance.

Regards
Per S
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