Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (39089)	8/16/1999 7:55:00 AM
From: goldsnow	Respond to of 116898

The Financial Times said central bankers at a Group of 10 nations meeting in Basle, Switzerland warned Britain its plan to sell more than half its gold reserve might lead to an unwelcome wider debate about gold's role as a reserve asset. infoseek.go.com

To: Rarebird who wrote (39089)	8/17/1999 6:33:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116898

The strength of the US dollar in the face of a growing trade deficit shows the global market knows when to pull together to ensure everyone gets what they want, says the BBC's Rodney Smith There's lots of talk of the global marketplace, the global economy, global corporations; but it is instructive to stop and think just how much the nature of global commerce is changing the way policy makers make decisions. The glowing example is the US economy, the Goldilocks Scenario, and the strong dollar. The BBC's Rodney Smith Former US Treasury Secretary Robert Rubin has successfully passed his four-year-old strong dollar policy on to the new Treasury Secretary, Larry Summers. On its own, this has not been responsible for the phenomenal stability and steady growth in the US economy over this period. But it is connected. Ian Harwood at Dresdner Kleinwort Benson points out in a recent DKB Global Economics Weekly that the strong dollar has been a remarkably sympathetic policy for all involved. If the US had not encouraged the yen and the mark to ease in the mid-1990s after the dollar fell to a post-war low, the world would almost certainly have flopped into deep recession followed by deflation. The strong dollar (thank Fed chairman Alan Greenspan too) gave the US firm monetary discipline when it was needed. But there is a cost; the fast expanding trade deficit and the associated increase in international indebtedness. Economic conundrum Sooner or later, says conventional thought, the deficit will knock the pins out from under the dollar. That it has not done so yet, is probably testament to the huge pulling power of US assets, and in particular, high tech stocks, internationally. The US tech and internet sector still leads the world by miles. Add to that the mysticism that surrounds the economic miracle of the Goldilocks Scenario, and it's no surprise that foreign investors think the US can do no wrong, big trade deficit or not. However, as Ian Harwood shows us, this state of affairs is attractive so long as it is attractive; it's a good old fashioned economic conundrum. The key to avoiding problems is to keep the dollar strong, or at least allow only controlled weakness. Which is why the Japanese are so keen to stop the yen appreciating and why the Germans admit that a weak euro is good for their economy. No one wants to rock the boat. But then, global policy makers have been learning that the interest of one is the interest of all. Let's see how long it can stay that way. news.bbc.co.uk