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To: Crimson Ghost who wrote (77932)	11/5/2000 3:05:38 PM
From: kodiak_bull	Respond to of 95453

OT George (I'm labelling these OT because it seems a slow Sunday and I'm not sure more than a few care. Sorry for any bandwidth inconvenience.) The trade deficit is a bogeyman folks have been pointing to for years, yet it never seems to bite us. Funny, isn't it? First of all, who wouldn't want to buy all sorts of real things (trucks, earth moving equipment, microchips) and pay for it with one's own currency (just IOUs)? Tell me, who's worse off when we pay freshly minted dollars for Toyotas? Which side of the equation would you rather be on? Second, the "massive foreign debt." What is the concern with this? And whose debt is it? The 3rd world? Well, they're already working on getting it all forgiven, deadbeats that they are (don't you just love it when they blame the lenders for their problems?) Other debt? I'm not sure what you're driving at here. People used to jump up and down and moan about our federal debt, our deficit, but now that that's been put to rest (by the Reagan Revolution, the Bush follow-up and the 8 years of Clinton economic benign neglect), we find out that the national debt bogeyman was, in fact, nothing more than a paper tiger (pun intended) that a healthy tax cut/economic expansion could handle in record time. Now, mirabile dictu, we actually have to be concerned about how to handle an economy which doesn't have enough federal paper out there(so the Federal Reserve's interest rate actions have substantial teeth). So let's say the strong dollar declines by 10-15%. What happens then? We pay more for foreign goods but our domestically produced goods are (finally) more competitive. Is it a wash? I don't know, and I don't think AG or anybody else does, either. A weaker dollar should make us raise, marginally, the amount we have to pay to get foreigners to buy our bonds. But, wait, the Treasury is already buying back the bonds and they are becoming, relatively speaking, rare. So, maybe that is closer to a wash than people want to think. First real concern, the tech bubble crashes harder than anyone predicts and money leaves the market for a much longer time, including foreign money. Those pesky foreigners sell their dollars and convert them to Swiss francs, Yen, maybe even the Euro, which causes the dollar to weaken further. But, George, by now you can see there are so many strings to this particular marionette that predicting his dance across the stage is getting nigh impossible. An undue strengthening of foreign currencies works against those economies in the same way you're worried about a strong dollar setting us up for a fall. Second real concern: our domestic personal and corporate debt start to crash. There's the real danger. At least we can be thankful that Cisco funded all its acquisitions with The Republic of Cisco Currency, and not the general debt markets. But there is a passel of corporate debt out there and if anything, this second concern is the real concern, the real danger. In any event, I'll go back to my main point: even if all we do is "exchange dollars created out of thin air for real goods and services from abroad" for a while longer, let's all enjoy the sunset period. After that, we'll have to go back to paying full price for real goods and services; as consenting adults, that, in and of itself, shouldn't give us too much worry. Regards, Kb