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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (29499)	4/26/2000 9:28:00 PM
From: KeepItSimple	Read Replies (1) \| Respond to of 42523

i'll admit up front that i'm nearly clueless when it comes to currency markets, but can someone answer a question for me? if the interest spread between the yen and the dollar, or the yen and the euro, are on the order of 5 percent, wouldn't every bank in the world participate in a carry trade to exploit the difference? what is stopping this carry trade from totally destroying the concept of individual currencies? when money can be exchanged and wired anywhere in the world instantly, how can any country afford to have a different interest rate than every other currency? how much effort are world governments expending to keep the entire world financial system from collapsing under the weight of arbitrage? i dont know about you, but if i were bill gates i would borrow 50 billion dollars worth of yen, then wire it to the US and draw interest on it. shouldn't every citizen of the united states? what is keeping this from happening? i can't understand why the wheels haven't flown off the wagon yet. it doesn't make any sense! --------------------- more and more smaller countries - particularly in Latin America and Eastern Europe - have questioned the value of an independent currency.