The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Wyätt Gwyön who wrote (60207)	5/3/2006 2:03:20 PM
From: russwinter	Read Replies (1) of 110194

I realize you asked me my view on the USD, and I answered about interest rates instead. I feel confident in my view about FCBs marking up rates, as their demand for all credit instruments (they hold a large and strange amount of agencies for example) xanga.com and US assets wanes (waning demand is different from a dump). I just think debt "asset" across the spectrum, are due for a large repricing, and lower. I'm not sure how that impacts the dollar. As long as foreigners hold USD in exchange for a fair and thus higher rate, the USD may get some support, especially if the US starts making less capital demands on the world. The alternative currencies also have to be weighed, and they have problems as well. In the short run the currencies that have been leaned on for leveraged carry trades, will benefit, as I expect these carries to blow up. Emerging economies, including developing ones like China are going to get hammered in my scenario.

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