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Politics : Foreign Affairs Discussion Group

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To: E.J. Neitz Jr who wrote (88467)	3/31/2003 8:35:45 PM
From: Sun Tzu	Read Replies (1) of 281500

> Relative to this nation's historical past it is quite small relative to GDP Sadly that is irrelevant. Like stock market, moves are based on incremental effects rather than absolute value. Any time a negative change is perceived, even if things are still better than they were at some comparable period in the past, markets head south. > this administration has affirmed a strong dollar policy Only after dollar was dropping too much too fast did they come out and say so and not strongly enough. Later on another "in the know" character whose name I've forgotten said something along the lines...probably the dollar was artificially too high anyway. Which is another way of saying we wanted it to drop but not in such disruptive fashion. > I am sure the Bush economic team would question that. Your opinion again. Sigh...now you are pushing me to dig up the info and do the research, even though you have not done any work for declaring your position. Currency markets are very fickle. What little remark a policy maker makes has huge effects on them because nobody is going to come out and say hey, I want to devalue my money. Greenspan and Co have their super-mild-and-cautious lingo for that reason. Even so, one of the Fed governors, whose name I cannot remember but will provide a link for later on, is on the record as saying deficit can always be cured because you can always print money. This is the kind of language that will send $ south no matter what White House says. I'll get you some links later on but don't expect me to do all the work for you. > Being primarily in bonds since Bush was elected, I have become richer... This has nothing to do with the currency effect. Compared to where you would have been if the dollar was strong, you are poorer. About a year ago, $C was ~$0.62 and I think the low in the past 3 years is around mid/high 50c. Today it is $0.68. So you lost 10% against the loonie since last Jan and about 20% if you go further back. Whatever your gains in bonds, they would have been 20% higher if the dollar had not dropped. ST

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