Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (469)	8/23/2001 3:27:59 PM
From: isopatch	Read Replies (1) \| Respond to of 36161

<amount of foreign money in the US BOND market>? According to Steven Roach, chief economist with Morgan Stanley, 40% of all US treasury securities are owned by foreigners. Even a moderately significant exodus by them from our bonds, notes, and bills would be put upward pressure on interest rates and drive our economy deeper into an inflationary recession (aka stagflation) as the Fed would desperately try to hold short term interest rates down via their open market desk buying larger quantities of Treasuries than we've yet seen. The resultant liquidity injected into the monetary system would increase money supply growth beyond the current pace which is a 20 year high! That would then increase inflationary expectations and drive the dollar down which would encourage more foreigners to exit our bond market and the dollar. Truly a vicious circle. And IMHO, it's already started. That's why the gold stocks are an important LT investment vs only a ST trading play. Forecasting beyond a few days is really a fundamental analysis process - per the above - vs the TA we find so valuable in ST work. Isopatch (Posted this as a reply to Don Sew on SA II. He asked if anyone knew the amount of foreign ownership in our Bond and Stock Markets. Thought it would be of interest here too.)