The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: eddieww who wrote (3697)	12/21/2003 8:16:48 AM
From: russwinter	Read Replies (2) of 110194

<Show me the ill effects of the drop in money supply to get my attention.> I believe a substantial chuck of US money supply decline may be "capital flight" (version of the carry trade I described here): siliconinvestor.com going abroad (or returning abroad) in a "giant sucking sound": first manufacturing and labor, and now capital. In effect, it's feeding the USD decline. Picture two ships passing in the night: one filled with recycled dollars from Asian CBs going into port, and buying mispriced longer dated securities, and the other leaving with dollars from short dated securities (mispriced again) seeking a more correctly priced return abroad: in Europe, Australia, or even tangible assets (), etc. It's like reshuffling the deck chairs on the Titanic. That's just another reason why rates need to be increased to defend the USD. It's hard to quantify and it's just my pet theory (and logical), but if anybody runs across commentary that addresses this aspect, please post, because it's not being covered much even by the "bear media". () Example of capital flight: I've been to France twice this year, and gave serious thought to buying a house in one of the incredible Loire Valley towns like Chinon. Just not that expensive (at least it wasn't 15% lower euros ago) and it's heaven there. Passed primarily because I felt I would have suffered from language difficulties, and the French sort of expect you to speak French, not English. The dollars I would have payed would likely have left the US domestic money supply for good.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next