CRB index and Currencies by Don R. Hays
April,2
......my vision is that the signal from my asset allocation model, and now from the Arms index,
will produce a rally based upon the sedated herd’s faith in Greenspan, (Ugh!) But by
2002, the world will be in a mighty battle of currencies, every country in the world being
hurt by the loss of exports to the rich U.S. consumer who has pulled in their horns. The
dollar will remain king, of course. Maybe a better way to say it would be that the U.S.
consumer who has lost their confidence in the stock market’s perpetual money machine
has taken a big break from their incessant spending to rebuild their empty pocketbook. To
try to boost those exports again, those countries will start cutting short-term rates, and the
U.S. will be pulled right along.
With a mundane U.S. economy, and recession in most of the world’s economies, I expect
short-term rates to eventually fall to 2%, and the 10-year Treasury note’s yield to fall under
4%.
And as country after country roots out their dictators, corruption, and socialism, and
democracy finally allows those billions of oppressed non-workers in the world to get jobs
and become consumers, then the stage will be set for a new super-cycle bull market that
will reward the productivity enhancer producers......... |
