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

To: ramcc54 who wrote (58530)	9/21/2000 9:29:47 AM
From: BigBull	Read Replies (1) \| Respond to of 116790

ramcc54, the scenario you describe is feasible and I'm sure some will try it, however it does entail a tremendous amount of risk that would probably scare off many from trying it. Imo the chief problems with the dollar at this point are these. 1. It poses a grave threat of inflation to the countries it is strong against. 2. It imposes what is effectively a huge worldwide tariff against US goods and services. The world wide CB's do not like number 1 at all as it makes their job tremendously more difficult. I expect the Bundes bank hates it worst of all. US companies and US based internationals hate number two. I mean the ceo's of these firms are probably pulling their hair out right now because of the tremendous disadvantage dollar strength puts them at. Imagine being a salesman of US goods in Europe right now. As soon as you walk in the door you are at a 27% price disadvantage. Earnings report after earnings report are now forecasting lower earnings due to the Euro. Kinda makes me wonder why people love the dollar so much. Dollar strength is rapidly sapping the US economy of strength. This is a fact that is born out by both corporate reports and the soaring trade deficit. When the psychology will turn I don't know, but I expect the almost universal bearishness on gold means sooner rather than later. We'll see. BTW the G7 is meeting this weekend and I'm sure the Euro will be on the agenda. It remains to be seen if anything will be done in the way of intervention. But you can bet the Euro and currencies are firmly on the radar screen as a major issue.

To: ramcc54 who wrote (58530)	9/21/2000 10:53:06 AM
From: LLCF	Read Replies (1) \| Respond to of 116790

<Have a question about hedging the dollar? Here is some thoughts I will share, with the dollar this strong wouldn’t be smart for foreign companies to buy US products like Aircraft. They place their orders today in dollars; now if the dollar is down say 20% when they need to pay up at delivery they would make out good. For the seller like say Boeing they would need to hedge the dollar to make sure they didn’t loose the profit on the sale because of the decline of the dollar. Here is the root of my question; does the hedging of the dollar all so put pressure on the dollar to bring it down?> All though most large companies do substantial hedging, many don't hedge everything, and some may not at all.... companies routinely talk of how currency translation helped or hurt operations for example... at the moment Porsche has been reaping benefits [in home currency terms] from the strong dollar... obviously they are not completely hedging their expected sales in the U.S. ahead of time. As to pressure on the dollar, this theoretically depends on the balance of trade... ie. are we importing or exporting more and in which currencies, it gets very complicated because of all the different currencies used to import goods into the United States. Supposedly the large trade deficit the U.S. has run should be a long term negative for the dollar, the hedging you talk of is more a timing issue for the company based on delivery dates and fluctuations for that time period between order and delivery depending on the delivery contract and shouldn't have much in the way of long term ramifications. dAK