The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: nextrade! who wrote (25608)	12/4/2004 11:55:18 AM
From: X Y Zebra	Read Replies (2) of 306849

There are other reasons Asian central banks will probably not lead a panicky charge out of dollars. For one, Asia's economies still depend heavily on exports to the U.S. for growth and jobs. If Asian central banks stop buying dollars and send U.S. interest rates soaring, they will tank their biggest and most strategic market. "It's probable that over time central banks will want to reduce their exposure to a single currency like the dollar," says Nick Bennenbroek, senior currency strategist at Brown Brothers Harriman & Co. "But there's not much risk this will happen anytime soon." <snip> The U.S. and Asia can mitigate this risk by moving aggressively to correct the imbalances. The Bush Administration must devise a credible plan to narrow its yawning fiscal deficit and boost savings. HO HO HO HO... as if it were a possible event.... Asian governments could start cutting their addiction to cheap currencies. "If the U.S. is ever going to reduce its trade deficit, somebody [in Asia] has to reduce their exports and increase domestic demand," notes Akio Mikuni, founder of credit rating agency Mikuni & Co. Ah... the day when Chinese consumerism (or Asian, for that matter) becomes a reality... who would care for a 290 million people market, when you have 3 billion people to sell to... the when is the unresolved 'x' not the if... The doomsayers have miscalculated their timing of their 'common sense' theories, which have failed to materialized, due to power central bankers can still wield; this allows for the inertia of the status quo (i.e. the ability of the dollar to remain as the single most powerful currency) and has saved the US from financial disaster. But as soon as the Asian economies can evolve from their current export oriented machinery to one more driven by their own domestic markets and/or an inter-country trade (within Asia -or other parts of the world, not being dependant on the US market...) Then, their financial storm stories may become more real... [American enterprise may yet come up with a magic sword to slain the threat of a financial dragon... but time is running out]

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