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Politics : Ask Michael Burke

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To: Joseph G. who wrote (29178)	6/17/1998 6:01:00 PM
From: Knighty Tin	Read Replies (2) of 132070

Joe, It is good for the US if the dollar goes up because our trade deficit is out of control. Reuben Sandwich and Greenspandex would like to see an orderly retreat and not a rout of the dollar. At some point, if the dollar continues to gain strength and we keep buying more than we produce, the dollar goes into freefall against gold and platinum and diamonds and the Euro. The reason the intervention won't work is that we don't see much in the way of import shrinkage until we reach about Yen 100 to the buckaroo. And our authorities aren't that hot to trot. Also, a lower dollar requires higher Japanese interest rates. Combine higher rates with lower exports and what is now a recession slides quickly to depression and then to panic in Japan. In other words, do the Japanese cut off their heads to cure their cold? BTW, a recession is when your neighbor loses his job. A depression is when you lose your job. A panic is when your wife loses her job. <G> MB

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