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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: LLCF who wrote (531)4/29/2003 10:22:02 AM
From: GraceZ  Read Replies (4) of 4912
 
yes the Japanese can invest in Germany [sell dollars for Marks], but that creates a strong Mark

And why didn't they do this? They believe they can get a better return in dollar denominated assets (whether they are right or wrong). Capital flows to where the market participants believe they can get the best return. Now here you are smart enough to see that anyone who holds dollars has a choice of what to do with them, but you feel compelled to defend the guy who seems to think that our trading partners only have two choices, either buy dollar denominated financial assets or devalue their own currency. Why, because his theory supports your prejudice. Whatever happened to critical thinking?

The debt created by the annual trade deficit maybe takes maybe 12-14 billion to service. It's an amount almost equal to the free cash flow from one American company, MSFT.
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