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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Tom Smith who wrote (76436)	3/7/2001 8:33:11 AM
From: Earlie	Read Replies (3) \| Respond to of 436258

Tom: And this is just the beginning. What most "investors" don't seem to understand is that the U.S. dollar is poised at the edge of the abyss. In simplistic terms, here is why. The U.S. runs a huge trade deficit. It also runs a huge current account deficit. Those deficits have to be financed one way or another and that is done by foreigners, recycling their trade surplus gains back to the U.S. in the form of loans (U.S. treasuries, corporate debt paper, etc.) The sums are huge,.... about $2.0 billion a day being required (and rising daily). Foreign lending MUST CONTINUE or the whole house of cards implodes. Why is this so? U.S. citizens have no liquid (real) savings (and none in sight with a net negative savings rate over the last three years) and what little savings those U.S. citizens do hold are fully exposed to the stock market. Those deficits can't be financed from within, hence there are no other sources of financing for those huge deficits except foreigners. Unfortunately, foreign lending to the U.S. has recently hit the wall. Japan is imploding. Its banks are bust, its domestic sales are shriveling and its all-important exports, especially to the rest of Asia, are collapsing. Forget any help from this former huge supporter of the U.S. madness. Asia is also in collapse mode. As the U.S. economy has decelerated, Asian exports have tanked. Forget Asia as a continuing lender as the wherewithal to so do is evaporating. Europe can still afford to be supportive, but it can't take up the slack created by the demise of the other big lenders. As well, Europe has "had it" with the U.S.. Think not? Well explain Europe's determination to birth the Euro. And also explain Europe's decision NOT to reduce their rates, even after the U.S. has virtually implored them to so do. Greenspan desperately needs Europe to drop its rates before he can do likewise (that "interest rate differential" thing I keep harping about) and they have unequivocably said "NO". As an aside, do we now understand why Greenspan has been delaying that rate reduction the markets so desperately await? Now one should understand why Greenspan is flooding the U.S. system with liquidity. Those deficits have to be financed one way or another. And of course, he also knows that if consumers cut off the borrowing/buying, there goes the economy, the market and the whole ball of wax. Fortunately, not everyone is a dunce, and many folks recognize a wholesale dilution of an already watered down currency when they see it. So what alternatives are there? In spite of the truly stupid comments of those who refuse to assimilate the lessons of history, gold will provide the answer..... as it always has. (g) Best, Earlie

To: Tom Smith who wrote (76436)	3/7/2001 9:36:04 AM
From: LLCF	Respond to of 436258

Ho ho...nice pop! DAK