I really cant predcit how the day will end, but its gonna be at best a bad start. The asea situation is now kinda like plug one leak and 3 more pop up. Korea pulling up, indonesia (wait and see), and now hong kong gets nailed and everyone else follows in sympathy. IMO HK is making a big mistake, they say they will hold the line on their currency and most believe its unsustainable. Japan has said the same thing about 130 yen, and that also troubles me. They are painting themselves into a corner. Japan has more forriegn curriencies in the bank than anyone in the world, HOWEVER the have 575 billion on bad loans to deal with and they have issued more yen into circulation
whenever their forriegn currencies go into their vaults (as I understand it), therefore the money is in effect (already spent). I think that if they say they will hold the line in 130 area and they cant and the market begins to sense this(as is happening now in HK) then Japan goes down bigtime. Ditto that for japans real estate market, the banks, etc. Then they have to sell US treasuries to cover their arse.
Question for all-Since we are the worlds largest debtor(I believe), I am wondering what happens if our US dollar devalues(however I dont see it now). IE- are our debts payable in US dollars or do we have to repay in the respective curriencies. I think its US dollars and thats good if thats the case. Regarding xoma, its best not to watch and if you are a longterm investor list the reasons you own it. Remember this
their fortune lies in whether bpi works or not. It doesnt matter in the longterm what the stock market does interm (to some extent). Lastly
we have our cash to run our company, it comes down to bpi results. |
