The Justa & Lars Honors Bob Brinker Investment Club Message Board

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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: Boca_PETE who wrote (7385)	8/4/1999 12:21:00 AM
From: JF Quinnelly	Read Replies (1) of 15132

The dollar would weaken in Peter's scenario. Foreign holders would be selling Treasuries and exchanging the resulting dollars for their home currencies. This bids up the foreign currencies demanded against the dollar. This can be deadly for the stock market, it's similar to what happened in '87. We announced an intention for a weaker dollar, and the Japanese decided they didn't care to get caught on the wrong side of that currency move. So they sold off some Treasuries and took the capital home. We got our weaker dollar in a hurry. Some analysts say that the repatriated capital is what created the Japanese bubble of the late 80's.

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