thanks for newest Roach, he and I agree at global 2.5%
actually he says 2.4% for 2003 GDP growth, but why quibble?
I appreciate your kind drops at my feet
I always pick them up
in fact, my PC has a file of at least 40 Roach essays
all dated just in case
call me a packrat, call me anal (they both fit)
the loudest point made is the severe drop in expected European GDP
IMF pares from 2.3% to 1.1% in its revision
Roach forecasts EuroZone 0.8% only
if we see EuroZone GDP of between 0.8-1.1%, then this will put a sharp damper on any continued rise in the EURO currency versus the USDollar clownbuck
which will give some illiterates encouragement to believe the US$ is ready to stage a comeback
but such could not be farther from the truth (lit by reality)
instead, I think it means the US$ is ready to find another currency to eat a large slice of its fat obese ass
the Japanese YEN
notice the agreed upon TORRID Asian GDP rates of growth
IMF at 6.0%
Roach at 4.6% (factoring in SARS)
my conclusion: expect Asian currencies to rise versus US$
the Nikkei might be signaling this big move
of course, it is also using a megaphone to announce a procession to the gallows for their major banks and some of their keiretsus
Japan is now a mix of totally dead banks (holding trillions in underwater mortgages), bloodless conglomerates, and a few viable strong corporations (e.g. Sony, Toyota)
ten years of Vampirism has bled the healthy business units dry in their sick demented form of conglomerate "life support" system of business management
now some of them must die, sadly
oh well, you cannot cheat the Grim Reaper for more than 10 yrs
I expect the YEN to rise over the horizon versus the USDollar
so Japan in 2003 may be the Land of the Rising YEN (unwillingly)
I say unwillingly, since their economy will suffer on its export side badly
they will compare poorly in US eyes on imported product prices
oops, I guess building such an excess capacity Japanese economy dependent on US Fortunes might have been a mistake
this will make for a much more dangerous spring/summer 2003 than we saw in 2002
last year was the EURO's turn
this year is the YEN's turn
with painful consequences on the Asian import side
both IMF and Roach emphasize the gaping US trade gap and the monster Asian trade surplus
in fact, IMF expects US trade gap to widen even further
such would be near catastrophic an indication imho
currency readjustments follow such pressures naturally
such is the stuff of Supply & Demand Laws
(Bank of Japan will soon be helpless to this flow)
I expect the USDollar index to end 2003 somewhere like 86-88
it is now 100 and struggling
I believe the widespread Asian currency appreciations might indeed pressure the Chinese govt to allow a YUAN increase
that would and will confirm "ALL HELL BREAKS LOOSE"
since that means the USA imports price inflation
by the end of 2003, I expect CPI to be at 3.0% and rising
with TENs yield at 4.5% and rising
with mortgage rates 1% higher
with residential real estate falling in price across the board
/ jim |
