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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (2509)	8/15/2000 4:05:05 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 3536

Eventually I see currency debasement as the only viable exit. Absolutely agree. With the BOJ opting for tough love and quite unlikely to return to zero interest rates, the cost of borrowing will increase in Japan. And maybe this zero interest aspect of the Japanese economy may partially underlie why manufacturing there is so much more attractive than home grown industry, despite the lower wage base here. Cost of capital in the US is far higher, thus equating to a net subsidy of Japanese business that permits them to pay higher wages to their workers. But the Japanese tax burden is more than likely to increase in order to make the interest payments on their national debt. Interest rate increases on their JGBs will increase the need for either additional revenue enhancement, or increased issuance of debt as a means of "stealing from Peter to pay Paul". This condition could reduce the favorable export conditions that Japanese industry currently enjoys. To offset a potentially higher yen that one would think would accompany higher interest rates, monetization would need to occur in order to keep the Yen in particular range. For that reason I'm not yet sure that shorting the yen is a good idea. What do you think Henry? Am I missing something in my logic? Regards, Ron

To: Henry Volquardsen who wrote (2509)	8/16/2000 7:04:39 PM
From: Paul Berliner	Read Replies (1) \| Respond to of 3536

Re: mssg 2509: Henry, that's the first time I can recall you mentioning T/A in an post of yours that I've read. Just how big on T/A are you? For some reason, I always figured you would be critical of it. Personally, I think that short and intermediate term trading (to me, about 1 week to 1 year) is greater than 50% T/A compared to fundamental analysis. I am working on a new area of T/A which I am hoping will knock everyone off their seats. It is based on the laws of logic and deductive reasoning, where you trade by playing the percentages of certain 'proofs'. I have to complete more testing on it, but I think I am on to something. I will preview it in April 2001, which is when I will be eligible to receive the CMT designation. I did not think that you cared much about T/A because you have never written about charts or posted on any of the T/A threads. That leads me to believe that you use it only as an analysis tool for picking entry points and targets, i.e. you dont open a trade just because you come upon a chart that looks a certain way. Right? Anyway, I am guessing that you are quite astute in T/A, as you are with every other market discipline, and thus I look forward to many future conversations on the topic with you.