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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (54109)	6/14/2000 6:50:00 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 99985

Joan what you are missing is ...... that the music stops. The shell game can not go forever. October 1998 was a great opportunity to bring the financial stability back, but Monica spoiled the plan. Since then, politicians have learned that financial markets can be manipulated for political gain. I never seen or heard of a political figure who had his nation interest above his own interest to stay in power. So politician will continue to manipulate the markets for their own interest not for the people. As to the actual financial issues Japan is a great example how excesses can not dealt with fiscal or monetary stimulus. Once the mentality turns it takes a long time to bring it back to normal. Unfortunate the US is not alone in hyping stocks and financial markets and the results will be dear the longer they promote it. That is why I will prefer a .50% interest raise now and a substantial NAZ slide of at least 50%, than to try to work it out as no politician will do it any way. All other solution are bandages and nothing more. ......... but again those are theories <GG> BWDIK Haim

To: Joan Osland Graffius who wrote (54109)	6/14/2000 7:02:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Joan, what you are missing is that the US consumer is drowning in debt. so it doesn't matter what Japan 'wants'...it is anyway a flawed plan from the Japanese PoV to somehow want to keep the US bubble afloat 'until we're fine again'. if this is what the plan really is, i guarantee you it will backfire in a big way. the same goes for Europe. the main flaw in the plan is that the only way for the US bubble and the associated demand by the US consumer to continue to expand is by actually allowing the related credit/debt bubble to expand further, as well as the current account deficit. however, there are simply natural limits to this. at some point, the money printing that is needed to make this plan into a reality will undermine confidence in the fiat system...the demand pull on resources (see oil) will stretch the ability of producers to supply these resources to the limit as well, and eventually, one of the wheels will fall off. this could be anything...an energy crisis, the blowing up of the Euro or gold carry trade, or simply an inability by the overindebted corporate sector / consumer to incur further debt to finance capital investments/share buybacks/consumption. we're not in Utopia yet, were it would be possible to let the imbalances grow ad infinitum without consequences. furthermore, if it should be decided by the powers that be that instead of stepping on the brakes the bubble should be allowed to expand further, the subsequent denouement would definitely be a catastrophe that it would take decades to recover from. imo it is actually possible that the 'point of no return' has been passed already, and that this outcome is already unavoidable. certainly the sheer magnitude and duration of the boom thus far would argue for the bust to be of likewise spectacular proportions. regards, hb

To: Joan Osland Graffius who wrote (54109)	6/14/2000 7:23:00 PM
From: UnBelievable	Read Replies (1) \| Respond to of 99985

Neither Japan Nor Europe Needs to Keep US$ Strong Even with an adjusted exchange rate they remain a very strong competitor. The reality is the United States could not function without imports without a major redeployment of capital which would be extremely expensive and probably take at least a decade. I would imagine that imports from both of these areas are so price inelastic that a decline in the dollar (a price increase to US consumers) will not reduce the total value of the dollars they receive, but rather will limit the amount of their domestic product which they must export for those dollars. The result will be that these countries will get to keep a little more of what they produce than had been the case. From the US perspective this will be inflationary. Which as you know is what happens when you increase the money supply faster than the increase in the supply of real goods and services. I don't see the issue related to oil as being any different. While oil companies will probably benefit a little by selling existing inventory at increased prices and by marking up a little more expensive product, most of the increased cost will be passed back to the producers. Again with inflationary implications for the US. What the US has to hope for is that these other growing regions of the world will choose to buy additional goods and services from the US. Unless that is the case the inflationary pressure will result in not only a decline in purchasing power for US consumers, but also a decrease in demand for US companies. Which results in lower profits, lower stock prices, decreased demand for workers and decreased payrolls, which all combine to further exacerbate the problem. What could result is economic stagnation and monetary inflation. Not the end of the world, but the end of the world as we have known it over the last decade.