Dutch Central Bank Sale Announcement Imminent? Message Board

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Politics : Dutch Central Bank Sale Announcement Imminent?

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To: sea_urchin who wrote (22081)	12/4/2004 12:58:30 PM
From: The Wharf	Read Replies (1) of 81003

For What it is Worth If you have an increasing debt load you need additional dollars to pay off that debt. Such is our case. One can look nation wide at property and clearly see that our dollar has decreased in buying power. The flexibility we have is that of debt. This increase of debt adds to the lack of strength in the dollar as these dollars are future debt dollars. There has to be an increase in dollars to pay off this debt and ideally if would be seen in the GDP but it is not showing up in said. Dilution of buying power of dollar will in affect increase dollars and by doing so decrease budget debt. So one can pretty well be assured the dollar will not return to strength for some time to come. We have off set of out of control inflation by means of imports. This period has not been one of rounded US growth. Assuming this trend continues the course has to be contraction. There should be a period of roughly two to three years where we have inflation that appears minor before it is major problem. GDP based on internal demand taking place in our suppliers will eventually increase their costs to us. The gold market seems to be holding up. One reason could be value due to inflation however cost of mining seems to be more than covered in cost of gold now. It is my belief that there is now a certain amount of people who are thinking in terms of this being a protection in the case of a currency crisis. The political aspect of the world is terribly murky now which contributes to currency question. China will be increasing her military capabilities which is costly. Putin is not exactly in great shape. The Ukraine is an agricultural area as well as left over nuclear facilities that might have some value he would of liked to have attached to Russia. He is not as pro US as he was and US is pro free Ukraine There is also a new stock market of China to which Arab Oil money could very well be receptive. Many Arab dollars were put to work in our market timing was right returns were good. Perhaps with Arafat's demise there will be less unrest in Israel but with Sharon's personality I don't think it will last for long. Annan is well liked. At this point calling for him to resign is not too wise. If the UN is in name only to the US it is more than that to many other nations. It is my belief that gold is insecurity driven because of which currency can be used as a safety hedge in insecure times. Non sector economic slow downs are a slow process. The strong dollar end of it is starting to show up in Canada with a wee blimp in unemployment figures. The important part of this all is weak dollars with increasingly high labor rates is a problem unless the labor rate can adjust to more competitive. Labor rates here as well as many other mature nation because of laws cannot become competitive. We in US have a larger problem we need increased dollars to pay off the huge debt load we have. It all adds up to a very good case for a currency crisis. IMHO

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