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Strategies & Market Trends : Waiting for the big Kahuna

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To: bearshark who wrote (7514)	10/27/1997 6:59:00 AM
From: tekgk	Read Replies (2) of 94695

Bearshark, This is a continuation of my earlier discussion of M3 at 12.7%. I figure you are the only one old enough to remember and care. Did you notice that net new treasury purchases by foreign gov'ts went to 0 in June and is now going negative. Notice that the two coincided exactly. Once the foreigners quit propping us up, the fed was forced to monetize to cover the trade, current account and budget deficits. Yes there is still a massive budget deficit. The surplus stuff is total nonsense - check the treasury site. After all the boomers want a 34% return not a 6.2% return. Remember what happened the last time we let money supply grow at 4 times the growth rate of the underlying economy. I assume that you are not in the camp that thinks that Asia does not matter. You have probably figured out that we borrowed close to 1 trillion dollars over the last 3 years from Asia and that there is going to be no more new lending and that there might even be some redemptions. The temporary flight to quality by individuals from Asia will end in the next couple of weeks IMHO. I think that 1 trillion is significant what do you think?

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