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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Lee who wrote (2309)12/14/1999 8:36:00 PM
From: Henry Volquardsen  Read Replies (3) of 3536
 
1) With large public and pension debts one may question the long-term strength of the Yen because at some point the only answer will be to print money.

Repudiating the debt is also an option but since that carries unacceptable consequences I can't see an alternative to printing money. Something needs to be done to bring the debt and liabilities into a manageable range.

2) With large trade deficits and social security debts one may question the strength of the dollar because a weak currency will be needed to offset the weak economy and regain balance.

disagree. I just don't think the trade deficit is a huge problem for the US, at least not in the current global environment. As far as social security debts, for all the worrying we do about social security in this country it is much better funded than in Europe or Japan. We may indeed run out of money in the social security trust fund but that is at least a decade off. Europe and Japan will both hit the wall on this well before us.

3) With a more social government and older economy, Europe has untapped (untappable?) potential.

Europe has its own problems. Any group that has the French involved in economic policy will not have to worry about unsustainable growth.

I'm not trying to make specific currency recommendations. Just trying to discuss background economic issues and see what people are thinking.
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