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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: LLCF who wrote (171937)6/11/2002 6:05:37 PM
From: Haim R. Branisteanu  Read Replies (2) of 436258
 
DAK, the real rise in the USD started after the evil empire collapsed, and the victory in Desert Storm. It even survived 9/11 after Bush speech and hit a new high after it was clear that the war in Afghanistan succeeded to eliminate the Taliban and democracy will prevail there. Since the USD got downhill because the war on terror started to falter which in turn also turned a budget surplus to a deficit.

Trade deficits were present for the last 15 years or so.

All is true regarding fundamentals you mentioned until a certain point. Keep in mind that EZ is recovering much slower than the US and this should compensate for the trade imbalances to certain extent.

as in any other commodity the demand on the margin what counts and in case of the USD the Mattress Bank was a serious factor.

As to corporate profitability the US companies are far better off as they do not have the burden of health and social benefits existing in Europe. I think the cost there are almost double than in the US.

So the stock markets attractiveness in a global market is not greater in EZ than in the US IMHO.

The pace of the USD devaluation makes it difficult for EZ companies selling to USD countries to turn a profit. On the other hand US companies selling into EZ get a 6% to 8% additional profit from that business segment.

We will wobble until we will have a more moderate trend, down if the UK articles over the weekend are not true, other wise the USD will still reign supreme :(

(as to the Saud Clan pls. read some history)
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