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To: schrodingers_cat who wrote (142159)	5/6/2002 5:02:42 AM
From: GST	Respond to of 164684

Cat: About $750 million of that each day goes to pay interest on what we already owe. About $1 billion is for outward investment. The last $1.25 billion is to buy other people's stuff. Each year the interest component grows - and it has been growing exponentially. A few years ago it was trivial -- but it is no longer trivial. We owe the money. Even if we balanced our trade we would still owe all the past obligations. We have borrowed many trillions of dollars and just add more on to that each day. The debt is denominated in dollars -- there is a risk to foreigners that our dollar will decline. The smart thing for them to do if the dollar is going to go down is to sell their dollars as early in the decline as possible -- do you understand what I am talking about???? The decline of the dollar becomes increasingly inevitable as time goes on -- this is very well known. The longer it takes for the tide to turn the more dangerous the turning of the tide becomes. Take no comfort in the fact that it has taken so long -- that is the frightening part. If it happened a few years ago it would have been relatively mild. Just like a bubble, the longer it takes the worse it is when it bursts.

To: schrodingers_cat who wrote (142159)	5/6/2002 3:43:48 PM
From: GST	Read Replies (1) \| Respond to of 164684

The next leg of the bear looks to be coming soon -- now. It appears that the wholesale movement by foreigners out of US dollar denominated financial assets -- stocks, bonds and the dollar itself -- has begun. As the dollar falls so too will our stocks and bonds -- foreigners will dump them on the market to preserve capital. AG cannot raise short term rates so long term rates will go up and the yield curve will steepen. The market is selling off in recognition of this reality IMO. Good luck.