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To: mozek who wrote (474)	12/2/1997 2:47:00 AM
From: Ibexx	Read Replies (2) of 686

Michael, Just a couple of short comments first, more later when I get out from my "deadlines". China and Taiwan aren't exactly in the same situation as South Korea. The former had quietly navigated through several devaluations throughout the years and, in the opinions of many, China IS the reason for some of the current problems of the Asian tigers--an emerging competitive threat necessitating a realignment of the economic order in that part of the world. As to Taiwan, it still has an enviable warchest of national reserve (75% in US dollars, last I heard). Devaluations (from NT$25 to US$1 to the present 32:1) occuring in the past 2-3 years should cusion against any severe impact. Japan is near the trough whereas S. Korea will begin to experience a national sacrifice if IMF is extending a rescuing hand--hard medicine much like what Mexico had a couple of years ago. The following is from the famed economist Ed. Yardeni: __________________________________________________________________ COMMENT: The "Asian Relief Rally" is likely to push stock prices into record territory by the start of the new year. The Dow should peak around the middle of next year around 9500, plus/minus 500. Then I think it could move back down below 8000 through the end of 1999. The 30-year government bond yield is likely to drop below 6% soon. The drop in the price of gold below $300 is a harbinger of much weaker commodity prices next year. It also suggests that the US producer price index is likely to show negative year-over-year comparisons during at least the first half of 1998, i.e., deflation. ____________ Ibexx

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