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Gold/Mining/Energy : Gold Price Monitor

GDXJ 108.29

-0.9%

Dec 1 4:00 PM EST

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To: ramcc54 who wrote (58530)	9/21/2000 10:53:06 AM
From: LLCF	Read Replies (1) of 116790

<Have a question about hedging the dollar? Here is some thoughts I will share, with the dollar this strong wouldn’t be smart for foreign companies to buy US products like Aircraft. They place their orders today in dollars; now if the dollar is down say 20% when they need to pay up at delivery they would make out good. For the seller like say Boeing they would need to hedge the dollar to make sure they didn’t loose the profit on the sale because of the decline of the dollar. Here is the root of my question; does the hedging of the dollar all so put pressure on the dollar to bring it down?> All though most large companies do substantial hedging, many don't hedge everything, and some may not at all.... companies routinely talk of how currency translation helped or hurt operations for example... at the moment Porsche has been reaping benefits [in home currency terms] from the strong dollar... obviously they are not completely hedging their expected sales in the U.S. ahead of time. As to pressure on the dollar, this theoretically depends on the balance of trade... ie. are we importing or exporting more and in which currencies, it gets very complicated because of all the different currencies used to import goods into the United States. Supposedly the large trade deficit the U.S. has run should be a long term negative for the dollar, the hedging you talk of is more a timing issue for the company based on delivery dates and fluctuations for that time period between order and delivery depending on the delivery contract and shouldn't have much in the way of long term ramifications. dAK

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