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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Haim R. Branisteanu who wrote (4490)1/8/2004 11:03:29 AM
From: Jim Willie CB  Read Replies (1) of 110194
 
agreed and understood on EURO

we have a worldwide shift underway in banking reserves, major capital assets
away from the USDollar and toward the EURO
I would not be surprised if Arabs are big players here
and Russians also

I dont believe for a SECOND that EU deficit borrowing in the credit markets remotely touches what the USA demands
the US federal deficit is rising at over 7% of GDP per year
(gotta reverse the annual Social Security robbery, sorry)

I dont believe for a SECOND that current CB holdings of EuroBonds even remotely approaches levels of USTBonds

so with diversification away from US$ continuing in large volume,
with new issuance of USTBonds continuing in large volume,
the trend will continue for some time

sure, in two years, when EU exports are hurt badly,
when Chinese imports do damage to their economy,
when debts replace jobs and worsen the labor picture,
the EURO will decline

agree, but that EURO decline will begin after it hits $1.50 to $1.70

FOREX is RIGHTFULLY worried SHITLESS about an upcoming USDollar crisis
the buck will lead the fall over the precipice

by 2005, it will be clear that the only major economy on the planet suffering from price inflation and a faltering bond market will be the United States

while the euro will be regarded temporarily as a refuge
the EuroBond will benefit enormously as deflation is imported
just like what happened in the USA in the 1990 decade

the euro will eventually be seriously hurt from currency damage
the damage only comes AFTER the currency rises for a long period
but that entire euro decline will be in 2005-2006

if that seems outrageous and improbable, JUST WATCH
/ jim
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