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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Tommaso who wrote (1563)12/25/2000 6:16:49 PM
From: tradermike_1999  Read Replies (1) of 74559
 

It sure is. The Euro is up from .85 to .92. Rumor is that Arab countries want payment in Euros, not dollars.

And if the Fed lowers rates to help out the US stock markets or the economy, the dollar will fall with every rate reduction.

And if the Fed does not reduce rates, the markets fall from domestic selling, and foreign investors lose unless they, too, sell.

So no matter what, American equities collapse. And despite what some people think, they have a long way to go before reaching average levels ( i.e.P/Es of 12-15 and dividend returns of 3-5%.)



That is the nightmare scenario I was talking about when I first started this thread and why there is so much confusion and disagreement on what to do at the Fed board. They're stuck.
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