Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (34014)	5/20/2003 3:56:31 AM
From: Maurice Winn	Read Replies (2) of 74559

<Secretary Snow had said it is OK to kick the USD when it is down and that he will not fight back> Jay, it would be wise to be circumspect about kicking either the Japanese or the Americans when they are down. They know a bit about money and might do a bit of hunting of big game which bets too heavily against them. Snow bowing to me and inviting into his parlour to help myself looks just a little on the suspicious side. Of course what he really means is that the US steel producers are doing just fine with the lower dollar, so the steel tariffs will NOT need to be increased and might even be removed. Same for many other USA produced things. They recognize that the irrational exuberance was in fact just that so they realize that it was a head fake and it's time to lower the dollar somewhat [now already done] and for everyone to get back to work [now in process]. As you will recall, they said it's only in retrospect that one can be certain of the size of a bubble. Anyone could see that some cleaning up was needed, and they raised interest rates to do that and succeeded. Now, they want the cleaning up process to proceed apace. Hence the explanation that the currently saggy US$ is quite within normal bounds for what's needed to put them back in the box seat. It'll certainly force people to spend US$ sooner or later. The only thing that money can do is be spent to swap something with somebody else. Sure, it can be loaned, but all that is doing is letting somebody else do the spending while hoping to have a turn at doing it later when the loan is repaid. At 1%, the risk of dying before spending it is high, with little compensation for the risk. Spending, spending, spending. That's what's needed. The $ is a hot potato and spending is the name of the game. But I shall hold my cash for now. I want to see if GE has actually got hairy legs, as you suggested. I want to see if JP Morgan is burdened with a backwards bet on gold. Mqurice

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