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Strategies & Market Trends : The Millennium Crash
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To: bobby beara who wrote (163)8/14/1997 9:02:00 AM
From: tekgk   of 5676
 
Bob,

>> There is a lot of foreign money in this market

You are excatly correct! This is the BIG PICTURE! Since the beginning of 1996, 1.2 trillion (t not b) in foreign money has come in to America. Everything else in our economy is small potatoes. It's the foreigners who have been paying for our 150 billion current account and 170 billion trade deficits and our budget deficits. I know everyone says that trade deficits and current account deficits have been around for ever and don't matter. I disagree and so does Lester T. from MIT.

If Hashimoto were to follow up on his June public threat it would make the 30's look like a nice picnic. Japan is in a lot of pain right now. If they decide to take us with them by selling the 220 billion public and the 650 billion semi public US paper it's game over. If China or Hong Kong were to join in on the action add in another 400 billion. What effect would this have on the rest of world?

It is my greedy now generation that insists on government services and new cars yet is unwilling to pay for them that has gotten us into a position where foreigners can pull the plug on the economy whenever they feel like it. Greed always has a price. I drives me nuts when everyone stands around congratulating themselves on how clever we are and how wonderful the economy is. What would the interest rate and inflation picture look like if you took the 1.2 trillion out of the picture? Japanese banks are going to be impacted by the Thai problem and the Korea problem big time. Has anyone considered that they may have no other choice other than to sell some of the US paper to meet debt obligations?

I am having trouble submitting this article, sorry if it appears twice.
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