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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Henry Volquardsen who wrote (2021)	8/6/1999 8:01:00 PM
From: Hawkmoon	Read Replies (1) of 3536

Henry, I had a PM exchange with Fleckenstein earlier this summer discussing the competition that corporate bonds have been giving T-bills. A lot of corporations desired to expedite their bond offerings into the 1st half of the year believing that less liquidity would be available during the months leading up to Y2K. That was later verified by various announcements stating just that fact. My argument is that this fall will be the realm of the T-bill. Few will desire to hold excessive corporate debt, preferring US govt issues. And I disagree that there will be a US asset exit strategy until after the yen has been devalued. For these nations to do so would not make sense unless they had an alternative place in which to park their money. The logic being, why would they take dollar denominated assets, sell them and then put the proceeds into an asset that they are trying to make cheaper anyway, namely the Yen. That would only result in their absorbing even more losses on their assets. What do you think Henry? Regards, Ron

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