Bob,
As I put it in a previous post on this thread, there's currently a ''conspiracy'' to support the Deutschmark... until September 27, 1998. Once Germany general elections are over and Schroeder's put in office, the markets're gonna drop the DEM with a vengeance! Nobody cares about the US deficit! That's a purely domestic squabble between the Republicans and the Democrats. From a foreign viewpoint, the US deficit is mainly the last growth engine that's still working in today's world economy! Hence, don't worry: we'll keep lending the US all the money it needs to keep the global fabric running!
Yes, like you, I find yesterday's tumble in the USD/DEM insane! Can you believe this: Russia's economy is a wreck, tank divisions are likely warming up a few miles away from Moscow, General Lebed is watching his clock, Chernomyrdin is maybe giving away the Finance Ministry to Communist leader Guennadi Zyuganov... Finally, the whole Eastern Europe is holding its breath...... BUT all of a sudden Boris Yelstin's showing up on a TV interview! What's the deal then? You bet: He tells the world he's gonna stick to his presidentship (the better for him: 'cause if Boris loses his current job... he might start to drink!). Now, guess how this fabulous news impacted the currency markets: the greenback was just trashed away as if it was a worthless exotic currency! The markets rushed back to the DEM!!!!
Now, I tell you: wait for Sept.27 (Oh! BTW, the last time I dropped such a deadline on SI was in November 1997: I told the people on the Object Design Inc. thread that January 28, 1998 would be a turnaround for the stockmarkets because of the Chineses' New Year of the Tiger. On Jan 28, 1998 both the NYSE and the Nasdaq peaked.)
Place your bets!
Gustave. |
