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Strategies & Market Trends : Strictly: Drilling II
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To: Jim Willie CB who wrote (29017)3/4/2003 3:36:54 PM
From: Art Bechhoefer  Read Replies (2) of 36161
 
Jim, I actually do consider debt expansion to be a problem, though possibly LESS of a problem now compared with other more pressing matters. The U.S., despite its huge and increasing trade deficit, does not have debt as a percentage of gross domestic product at levels that are as scary as you apparently believe. However, given the fact that many foreign investors helped finance U.S. debt by buying Treasuries when the dollar strength was still steady, and given that the dollar continues to fall, I doubt very much that foreigners will be as eager to buy Treasuries as they were in past years. This means less money going into Treasuries, and by extension even stocks from foreign investors, leading to (1) higher interest rates and (2) less upward pressure on stocks. This doesn't sound like a very good investment climate to me and justifies some exposure to gold shares simply on the assumption that the dollar in relation to other hard currencies remains under pressure.

Art
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