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To: yard_man who wrote (168161)	5/24/2002 11:13:11 PM
From: TobagoJack	Respond to of 436258

Hi tip, I do not know about <<cogent>> but here is a <<rebuttal>> Message 17515000 blah, blah, blah and then eventually ... <<No 'Sell US' Scenario Yet>> Well, yes and no. No serious selling as yet, because there is still a net buy, but the early birds have been busy since mid-2001, and the Chicken Little types since mid-2000. By the time Andy says <<Sell>>, it would be a bit late for my comfort. <<The case for a weak dollar rests on the huge current account deficit that the US incurs>> I believe this is wrong. The case, in its entirety, rests on … relative (a) confidence in political leadership at the top (b) fiscal responsibility at the grassroots level (c) monetary prudence at the FED level (d) price levels at home and in US (PPP and expected returns vs. risk) <<I beg to differ. A 'sell US' scenario is far from developing. While the US equity market is losing its appeal, US fixed-income instruments remain attractive to Asian investors, who fund most of the US current account deficit>> and so the retreat has begun. <<Short-term rates are near zero in both China and Japan>> Yup, because the actual weakness of the US position allows both to print away without fear of capital flight increasing. <<Ten-year government paper yields less than 2% in Japan and 3% in China. The US 10-year Treasury is still yielding above 5%>> and yet the USD is falling. <<The oil producers are unlikely to withhold funds from the US. They are all dependent on the US for political survival>> and these oil producers may not survive in any case, thus part of the problem in the equation. ... followed by more bleep, blah, blop Chugs, Jay