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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (49901)	4/11/2002 1:18:10 PM
From: Jim Willie CB	Respond to of 65232

what killed USDollar-Euro-JYen triangle quasi-gold standard? USDollar: steady applications of enormous liquidity (aka money supply inflation) over two decades to treat whatever ails our economy e.g. OPEC hike recession, S&L bailout, Mexico bailout, Russian bailout, LTCM bailout, and now the biggest -- 2001 stock market bailout, followed by another bigbig one -- World Trade Center attack why not immediately seen as pernicious to price inflation? because of rising trade deficits now totalling nearly $300B annually (this could reverse if US$ slides more next year, importing inflation) Euro: 1991 German Reunification project which not only brought basket-case East German economy into the fold, but also to some extent Poland, Czechoslavakia, Hungary German became party to the Liquidity Abuse game their economy suffered almost immediate inflation and recession since they dont export such inflation like the USA but in 1999 the famed DMark went into limbo the Euro was not ready for prime time just yet so many participating countries didnt trust it enough but now even dowdy stubborn England might join the Euro JYen: the Great Nikkei 1980 bubble popped total refusal to inflate the currency into debasement early led to a string of bank dissolutions that are hardly even acknowledged today a culture whereby declaring bankruptcy requires CEO suicide in a public place just doesnt work in a global economy ten years into the fiasco, yearly wasting of liquidity funds went to farm subsidies, road construction (often to nowhere), and propping of keiretsus (conglomerates) and failed banks now Japan has blown years worth of printed money and has nothing to show for it and they have the world's biggest federal debt per capita they refuse to allow bankruptcy for failed banks, resulting in now a story for the history books their combined banking system is now over $1500 Billion underwater back to the US$-Euro-JYen triangle from 1999 to 2002, the Euro has been staging into usage so for a couple years, the USDollar has enjoyed more than its fair share of safehaven money seeking shelter from the increasingly frequent financial storms from 1996 to present, the JYen has been a joke resembling monopoly money now they intend to monetize their entire failed bank system this will send $1500 Billion into the system their large supply of USTBonds will have an uncertain fate I believe Japan refuses to allow individual banks to fail because it would result in a sudden huge sale of TBonds perhaps the death of the 30-yr TBond will be revived with an initial sale of $1000 Billion from Japanese as they re-install a new Bank System ??? the US$-Euro-JYen triangle is almost dead it is being shaken and stirred by financial storms it is listing badly on the JYen side my guess is it will lean upward more soon on the Euro side that spells trouble for the US economy and for US interest rates citizens and taxpayers the world over might beg for some gold standard to tether currencies before 2008 we will have no end to turbulence until it happens later, Jim