VOLTAIRE'S PORCH-MODERATED Message Board

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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Boplicity who wrote (52640)	6/4/2002 1:01:00 PM
From: Jim Willie CB	Read Replies (1) of 65232

dollar last declined from 1988 to 1993 Dow suffered a 40% decline Naz was not mature enough to be on radar screens the Gulf War served as climax once again, WAR ended bad economic times (funny) the US financial environment is much more dangerous now we have a decade more accumulation of dollars abroad back then perhaps 15-20% of USTBonds were foreign held now it is 45% back then US trade gap was thought to be huge at $200B/yr now it is $400B/yr and accelerating Greg, you cannot extrapolate back to 1990 and be accurate the dollar declined back then, for sure I am not aware of exact pct figures how much but bond/ currency experts (not stock fools) estimate that the dollar correction could be at least 15% and possibly more like 20-25% depending on world erosion of trust in American Govt leaders and corporate leaders I would say we are failing any remaining trust now double the previous decline in the dollar why? because far more than double the Dollars and TBonds are out there and we cannot control them or their sale I expect a large proportion to be exchanged for Euros and GOLD if the war widens further, then more will go to GOLD we print money without any thought to inevitable recourse now we will see the cost of socialism, liberal policy, world policeman, and financial well of last resort the ignorant public believes money printing is a good thing they have been taught by the Press and TheFed that Liquidity is good well, that liquidity ended up in foreign hands and it is being sold THIS WILL GET TWICE AS UGLY AS YOU MIGHT EXPECT interest rates are gauranteed to rise despite recession Ravi Batra calls it "The Upcoming Inflationary Depression" in 1929, a 15-yr old Federal Reserve caused the Great Depression they increased interest rates to stop the last outofcontrol expansion the focus back then was two-fold: automobiles, stock margin but the Fed refused to lower interest rates for FOUR YEARS this worsened and deepened the depression they didnt know what they were doing back then they barely know much now either why the Yen Carry Trade? why the Gold Carry Trade? to allow the dollar to become strong now comes the price of such disastrous policy / JW

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