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Strategies & Market Trends : The Millennium Crash -- Ignore unavailable to you. Want to Upgrade?

To: clochard who wrote (4261)	6/18/1999 11:48:00 AM
From: clochard	Read Replies (1) \| Respond to of 5676

Do investors really believe that the market has any real upside potential left? The smart ones will be asking this. Currency risk is another dangerous feedback loop built into the markets. Our stock and bond markets have attracted a lot of foreign capital, keeping the dollar strong. With the turmoil on the bond markets and the apparant lack of upside potential on the stock markets, combined with lower earnings growth, rising defaults, and better potential elsewhere, foreign investors will start to pull money out, putting pressure on the dollar. A run on the markets AND the dollar can have a multiplicative effect, leading to the collapse of both. Since the stock market comprises 40% of our "wealth", the first feedback loop I mentioned a few weeks ago will cause people to stop all spending, rendering the economy here "in deep doodoo".