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To: Jon Koplik who wrote (33642)	6/29/1999 10:19:00 PM
From: marginmike	Respond to of 152472

not in NY

To: Jon Koplik who wrote (33642)	6/29/1999 11:04:00 PM
From: djane	Read Replies (1) \| Respond to of 152472

Frontline show on at 9 p.m. PST in the SF Bay Area <eom>

To: Jon Koplik who wrote (33642)	6/30/1999 9:22:00 AM
From: Jon Koplik	Respond to of 152472

Re : "Frontline" show last night. The theme was : the recent era of (relatively) free flow of money worldwide (combined with countries like Russia, Indonesia, etc. being "strong-armed" into loosening up their restrictive banking rules, for the first time ever) eventually triggering massive capital flight (out), collapsing currencies, and plunging stock markets. Frontline did give a little background into some of the causes of the whole debacle. They said (and it makes sense) : some "developing" countries had currencies strictly linked to the value of the U.S. Dollar. Then in 1997, the Dollar started increasing in foreign exchange value versus those (real) currencies that floated (ones like the Yen, D-mark, B-pound, etc.). Thus, the developing countries were forced to drag their own currencies up, along with the Dollar, to maintain their fixed exchange rates with the Dollar. Eventually, their (the developing countries') currencies became very over-valued against what would make sense with regard to international trade and investment, and the whole debacle started. WHAT NO ONE TALKED ABOUT was -- Why was the U.S. Dollar starting to rise in 1997 ? Well, what did our "esteemed" U.S. Federal Reserve do in early 1997 ? They raised U.S. interest rates. (I know, it was "only" 25 basis points). High interest rates tend to increase the value of a currency, since the higher interest rates attract capital from elsewhere. In case anyone cares, what did I think in early 1997 ? I was "long up to my eyeballs" (for my own account) U.S. interest rate futures contracts, because it was obvious to me that U.S. interest rates ought to be unchanged to down from that point. What is the Fed going to do later today -- probably raise U.S. short-term interest rates. We'll see if this (again) begins the process of a global currency problem. Jon.