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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (4855)	10/15/2001 3:26:39 PM
From: John Pitera	Respond to of 33421

No I agree, inflation is not currently a problem, in fact the global deflationary forces are still busy at work. But It's always interesting to hear the ruminations of the Shadow FED. Open Market comm. :-) and an interesting data point from Japan with the investors there spurning the higher european interest rates and looking to keep more of their foreign currency risk with the US Dollar. Japanese investors were net buyers of Y873.9 bln worth of foreign bonds in August. Of interest, net purchases of dollar-denominated bonds accounted for more than one-third of the August total, while Japanese investors were net sellers of Y185.4 bln worth of euro-denominated bonds. In other words, despite the favorable interest rate differentials in European fixed-income, the Japanese seem more inclined to take their foreign exchange risks with the dollar, while betting that the Fed will continue to aggressively cut rates in an effort to underwrite recovery. As we have argued for some time now however, policy rigidity has fostered far different expectations from the ECB.