SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Dutch Central Bank Sale Announcement Imminent?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: long-gone who wrote (17264)2/20/2003 11:29:53 AM
From: Gary H  Read Replies (1) of 81980
 
Speaking of the Dollar, this is from the Richebacher Letter of Feb. 03.

"Today’s economic and financial conditions in the United States are incomparably worse than in 1987–89. Economic growth is much slower today, the trade deficit is much higher and interest rates are much lower.
But there is still a fourth factor that makes a great difference: the unprecedented exposure to the risk of a
falling dollar, running into trillions of dollars, both from existing foreign holdings of dollar assets and from euro
liabilities incurred by American corporations and institutions. The important point here is that both have
principally abstained from covering their exchange risk. Strong expectations to gain from a strong dollar or from
a weak euro prohibited any hedging.
But the unexpected reality for them now is a falling dollar and a rising euro. Being sure of a further long
and steep fall of the dollar, we have been wondering for some time when the foreign investors and American
borrowers will finally give up on the strong dollar and stop their bloodletting either by liquidating their positions or by safeguarding themselves at least against currency losses by selling dollars in the forward market. Such hedging has probably started, though at a moderate scale.
This brings us to the destabilizing forces at work in the markets. There is a widespread assumption of a
"normal" level of the dollar against other currencies, from which it will not diverge too far or too long. No such
level exists. The dollar is effectively out of control. There is no way to say where it may bottom. This is a
measure of the macroeconomic costs of allowing an external disequilibrium to become so large and to
accumulate for years. The dollar’s fate no longer lies in the hands of central banks or banks but in the hands of
many millions of fickle private investors.
Mr. Greenspan’s extreme monetary looseness created a whole variety of bubbles. The dollar bubble was one
of them, and all bubbles infallibly burst. Considering the incredible size of the excesses and imbalances that
have accumulated in the U.S. economy and its financial system, there is certainly the potential for an
uncontrollable crash of the dollar."
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News