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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Crimson Ghost who wrote (31125)4/24/2005 7:45:48 PM
From: gregor_us  Read Replies (2) of 110194
 
I Remember When You And I Chatted About This Theme

several months ago, FH. Thereafter the idea of pan-Asian currency strengthening went to sleep. Now it's back. Big time.

This Chinese RNB revaluation story, regardless of where it goes--if anywhere--is without question the loudest noise we've heard since the whole question started being debated. And this time it really is from China. For real.

This will of course very, very likely set in motion a whole daisy chain of fairly predictable events: RNB Revaluation triggers proxy currencies plays across the region, from the JPY to the AUD. A Higher JPY leads to a lower Nikkei. A lower Nikkei puts downward pressure (for now) on US interest rates. Downward pressure on US interest rates hits the USD (this was already developing, however). The USD getting hit helps EUR, Gold, and Oil and Commodities. A lower USD is a liquidity injection globally. This (roughly) has been positive for stocks. Though, most of the SP500 looks pretty un-appetizing for sure. But so what? Garbage can rally.

Anyway, best of luck to you and I'm happy for you because you have been playing in Asia for a while, and I just figure you must be about to make some money from this development.

Cheers.

LP
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