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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (6718)	8/5/2001 4:27:09 AM
From: elmatador	Read Replies (2) \| Respond to of 74559

JC DL CB I would like to share that with you: Message 16171032

To: TobagoJack who wrote (6718)	8/5/2001 7:28:56 PM
From: westpacific	Respond to of 74559

Dollar Index US competitiveness, measured by the current account deficit, has been declining since the dollar started to rise. The deficit is now at a record $450B a year, or 4.5% of national income - so large that the US needs to soak up 64% of the total net global capital flows to fund it. The US has had no problem attracting this money, partly thank to the rising dollar, and partly thanks to the high return of US companies. But the risks that investors will pull the plug are much higher now than they were. -US economic growth seemed different from past cycles. After 1995, it was driven in hugh part by rising labor productivity, which increased the profitablity of companies and brought extra investment into the US. (this idea will be destroyed this week with the revised GDP coming out Tuesday - it never existed and thus the bubble should never have occured). -The US government welcomed the strong dollar caused by increased capital inflows to the US. A strong dollar kept US inflation low - directly through lower import prices and indirectly by mitigating the effect of rising domestic demand through an incrase of exports. (say hello to inflation - Greenscams worst nightmare! Not to mention the potential for a flight of capital from US equity markets). -The ever rising dollar created even higher returns on US assets for foreign investors and an increasing inflow of capital into the US (helping to fuel the bubble). London Times - 08/04/01 ( ) - points added by me and not the paper. (Current index stands at 116, the high is 120 and the break is at 112). All the best West