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To: eddieww who wrote (46119)	12/11/2000 12:48:14 PM
From: Lucretius	Respond to of 436258

you got me.. i don't get it either...

To: eddieww who wrote (46119)	12/11/2000 1:57:52 PM
From: Archie Meeties	Read Replies (2) \| Respond to of 436258

You've answered your question already. "What's wrong with the picture?" is that the dollar is not totally at the mercy of the FED, since as you point out foreigners hold a tremendous amount of bucks both as debt and in equities. So debasing the dollar is something the FED can urge by lowering rates, but where the buck falls isn't totally in their control. Other problem with your quick fix scenario is that a fast 25% debasement will get the inflation juices going. The fed would rather the dollar to gradually move one direction or another instead of flop around like a fish out of water. BTW, if you weren't a clown and you thought US equities were overvalued, when would you exit the markets relative to fed easing? You'd exit near the beginning of the moves when the buck was strongest and the euphoria about AG saving the bubble was greatest. After a couple of rate cuts and no improvement in corporate profits the equity markets get tough loved and you step back at a weak exchange rate.