Hi John,
OK here's the $64.00 question!
With our new Treasury Secretary about to be confirmed (and with new powers begrudgingly yielded from the President) what economic gift does he bring to the table.
Surely he knows about trade imbalances and global swings of investing money.
What instrument of fairness does he strong arm onto China and Japan that adjusts for improper central bank reserve currency accumulations that are the result of intervened or fixed currency market imbalances.
It is afterall,"in all parties interests" to preserve the purchasing power of whatever fiat money system one places all there collective marbles in.
A Treasury Secretary from GS knows how to get this done,and then surprise the market with it - as Rubin before him did so effectively.
Is not the potentially biggest surprise to come down the road, a new joint plan that takes and install moral hazard into the value of the Dollar.
Mr Hazard, would insure that the Dollar reamined mighty (within ranges of course).This would take the volatility out of the currency - which would secure the value of all the commodities (perhaps now already peaking as a limited awareness of the forward looking plan distributes itself)?
I see this as very vauable to: China, Japan,Europe,Opec and the US.
If the dollar crashed,the Arabs would lose billions,oil would skyrocket,and an alternative energy solution would get a premature start that would reduce global demand before their reserves can maximize their forward looking wealth build.
My bet is the plan is already putting a "limit down" fear in many hedhge funds that have ventured into commodities.
This weeks copper experience was a bit of a wakeup call.I noticed the equity markets rallied very nicely during the selloff at the CRB.
Interesting to note that Clinton's budget surplus was accomplished from capital gains windfall derived from a equity revitalization in the late 90's.
We now have a "Wall Street Guy" of the highest pedigree.If he can work another equity run up and keep a stable dollar,there would be very few bonds to sell,and I bet demand for a lesser produced commodity would keep rates low for quite a while.
Sure do like that nice man Mr. Hazard - hope he stays around.
Bob
PS - I'm looking for Mr.
Secretary's new "term" or idea.
Have you heard any of his speeches? |
