MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.97

+0.1%

Nov 7 4:00 PM EST

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To: GROUND ZERO™ who wrote (34252)	11/26/1999 1:36:00 PM
From: pater tenebrarum	Read Replies (2) of 99985

GZ, since you are a position rather than a day trader shorting the bond is probably a quite rational decision. i fully expect the combination of global excess liquidity and Y2K disruptions to result in a big jump in inflation and a big run-up in commodity prices next year. the markets will slowly but surely realize that it will be hard to avoid this scenario. in fact paper-based assets may well be especially hard hit as the Fed could find it impossible to support faltering markets by cutting rates if and when inflation takes off. i also expect the dollar to come under pressure once the Y2K induced capital flight relents. fundamentals in the form of an exploding current account deficit simply don't support the current level of the dollar. otoh, the Euro is a currency that has an uncertain future...i still expect it ultimately to break up again. if and when that happens, the D-Mark could soar while the Lira and the Peseta would probably plunge. but that's still quite a bit in the future, i could be wrong and the political will re. the Euro may overcome the economic realities for a while yet. regards, hb

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