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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (56)2/16/2004 1:38:04 PM
From: Chispas  Read Replies (2) of 116555
 
Intervention Wars?

(Snipped from George Ure's column today)

While I would have written off the possibility are far-fetched foolishness as recently as a week or two back, when I look at how Europe is being threatened by Bank of Japan interventions, I can almost make the business case for the world's first-ever "Intervention War." It would go something like this: The European Central Bank allows the Euro to rise because it a) makes their currency more powerful and as a result b) the prices paid for oil from the Middle East (and other large-scale imports) effectively drop in price. Oh yes, the Euro also shoulders it way toward being the world's new reserve currency now that the whole financial world knows the U.S. is technically insolvent, but let's keep the musical chairs going as long as we can because the second major leg down of the worldwide Greater Depression will put even the 1930's to shame. You with me?



OK, now look at the position that Japan is in. If the U.S. dollar falls too far, it will bump up the price of Japanese cars in a major way, effectively killing Japan's biggest market. Lest you think I've completely lost my sense of economic perspective, go check the article at thisismoney.com and I think you'll see the possibilities yourself.



Meantime, there are two other articles out of Asia that are interesting to watch. One is the word that bank rates may drop a bit in Korea, yonhapnews.net, while the other is a report on China's dream economy. How would you like to preside over a 10% annual growth rate and an unemployment rate of 1.43%? Read english.peopledaily.com.cn. That's serious economic growth!
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