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To: Secret_Agent_Man who wrote (169439)	5/31/2002 5:34:30 PM
From: Ahda	Read Replies (1) \| Respond to of 436258

6. Tanking dollar For a couple of years now the balance of trade has been tipped towards foreign importers. In essence it has been cheaper for Americans to buy imported goods rather than domestically produced goods. Just look at all the “Made in China” goods in your local Wal-Mart. Sounds fine I suppose....until it starts to impact American workers and jobs are lost. The government has accused foreign governments of unfair dumping and attempted to redress the balance by imposing trade barriers and tariffs against foreign imported steel and softwood lumber, and has raised American farm subsidies. European trade partners and Canada have cried foul. Many of these same folks are allies in the war against terrorism. Running a trade deficit year after year is not a sustainable thing. Foreigners have taken those dollars earned from exports and put them in American equity markets. As American companies report falling earnings and forecast poorer outlooks those foreigners are getting nervous and selling dollar denominated investments. What Greenspan can NOT do is protect the dollar by hiking up interest rates, because he would instantly plunge the US economy into depression, and so with poor and risky (more and more downgrades of bonds to junk status) returns on American investments the dollar will continue to be jettisoned for other options. The dollar and gold price have been inextricably linked since gold was allowed to float in the Nixon era. Abandonment of the dollar - the economic lingua franca of the world - without a viable alternative safe haven currency in the Euro or the Yen, is precipitating a stampede into gold. With a tanking US dollar it may be worthwhile to purchase your gold shares on foreign exchanges in non-US currency to get a double bonus. To me this is the only reason. To go into detail on this means that the dollar is not creating the value it use too. So then the question is what dollar. It is nigh on impossible for not to question the dollars as my area is seeing inflation that severely limits investment opportunity. Simply put the dollar is loosing its power of purchase. Then a very large question forms, will the reward be adequate tomorrow for the risk that is taken today?

To: Secret_Agent_Man who wrote (169439)	5/31/2002 5:35:56 PM
From: Knighty Tin	Respond to of 436258

Crusader, Great piece. We have just come out of a decade where stocks were supposed to go up and assets down. I live through a decade, the 1970s, where the norm was the opposite and everyone was buying Franklin half dollars with silver content. The attitude here is that, of course, stocks are going up and this is an interlude. Possibly true, but interludes can last a long time.

To: Secret_Agent_Man who wrote (169439)	5/31/2002 5:48:40 PM
From: yard_man	Respond to of 436258

>>The media is only saved by the fact that it lives in the sound-bite era, sans memory - every market close expunges the sins of that day and all is bright, shiny and new on the morrow with the opening bell.<< This isn't deep, but it is generally true about many things in society and politics, but it takes a public without a memory as well -- that is what is truly disheartening -- many of us never learn any of the lessons that are there in history, if we just took the time to think about them.