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Strategies & Market Trends : Waiting for the big Kahuna

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To: Bonnie Bear who wrote (15685)4/7/1998 7:32:00 PM
From: Kip518  Read Replies (1) of 94695
 
Bonnie, while Faber was not given time to explain his reasoning, one could easily imagine the scenario where the yen rises dramatically. If the Japanese are pushed to the point that they begin to liquidate their enormous U.S. holdings -- selling dollars & buying yen -- obviously U.S. markets would get a triple whammy -- falling bond prices, rising interest rates & a collapsing dollar (not to mention a major government crisis). We trust that such a thing will not happen because the Japanese hold too much of our paper -- they wouldn't be able to get out fast enough not to be hurt too. Therefore, self-interest will prevent it. But, maybe they won't have a choice. Kip
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