Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (33964)	7/21/2005 11:28:26 AM
From: Tommaso	Read Replies (1) of 116555

As I posted elsewhere: It must have been a hard decision, since every notch up for the Renmimbi (one day I will spell it right) means their U.S. bonds are worth less. Also, any notch upward on longer term interest rates in the U. S. means their bonds are worth less. If they stopped buying the bonds for a while, and Japan did, too, the long bond could drop fast, don't you think? That would jack up interest rates for mortgages in the U. S. as well. Housing prices here could stagnate or drop. Housing equity could go to money heaven. Tens of millions of people could be priced out of their houses as their adjustable rate mortgages go up. The Chinese could get burned on U. S. bonds somewhat as people have been burned in the past on South American and Polish bonds. The U. S. can print the money to pay the interest and redeem the bonds as they come due, but with serious damage to the dollar. Maybe it is time to look into all the trashy books I own: "The Day the Dollar Dies"(1973), "Death of the Dollar" (1968), "The Coming Currency Collapse" (1980), "How to Survive the Money Crash" (1979).

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