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To: Haim R. Branisteanu who wrote (3688)7/13/2000 5:46:37 PM
From: Archie Meeties  Read Replies (1) | Respond to of 436258
 
A currency doesn't derive its strength from small changes in FED rates. A hike might be good for a short term boost but the longer view is that the pull of an equity market determines the flux of currency.

Only if you start with the perspective that we live in an equity bubble do you rapidly come to the conclusion that inflating the bubble by purchasing trash must lead to a debacle in equities and thus a flight out of the usd.

Short term, of course, we require massive infusions of foreign fiat to keep afloat.



To: Haim R. Branisteanu who wrote (3688)7/13/2000 5:48:38 PM
From: pater tenebrarum  Respond to of 436258
 
Haim, it was more a general comment on the mechanics of a disinflation bubble, where all the monetary inflation as evidenced by the extreme growth of the money supply is channeled into stocks. most stock valuations only make sense if you assume that they really aren't worth as much as they seem to be worth, because there's too much money in the system chasing them - i.e. the value of money has decreased vs. stocks.


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