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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (517)	6/18/2002 2:10:05 PM
From: Jim Willie CB	Respond to of 89467

agreed, Greeny prints (shops) til we drop unbridled dollar printing will not prevent dollar decline it will nurture the billions of inflation seeds out there who knows how long the deflationary spiral lasts? perhaps another year, maybe 10 months, maybe 18 months I continue to monitor the big bankruptcies they have not stopped the US Fed has shown its hand many times we have two choices 1. let rates go to zero 2. let inflation reduce the cost of our debts the Fed has a pattern of inflating, plain & simple the big questions are: a. what happens to the dollar's rate of descent? b. what happens to the dollar value of gold? c. what will be the response by foreigners holding TBonds? d. what happens to the trade gap? really really tough questions that I ponder weekly a. heavy increases in price inflation, whose seeds are already sown with ungodly monetary inflation since 2000, will surely cause our interest rates to rise, as creditors must be encouraged to hold debt with higher debasement of principal... so higher shorterm rates will help in removing the dollar yield disparity that is now hurting the dollar... but the higher rates WILL KILL corporates profits, and really slam stock valuations... the immediate effect is on the hotmoney financial markets... they get hurt, and foreigners accelerate their move out, and home b. as inflation returns to US soil, gold will rage upward... funny how just two years ago we celebrated the death of inflation... now due to the high devastation costs of deflation, WE NEED INFLATION AGAIN... because it serves our purpose of perpetuating the ongoing payment of the unpayble treasury debt... either gold rages up or the entire US (and world) economy descend into Hades c. USTBonds will have to offer higher yields... but you dont go from low to higher yield without some big instability... just like with weather, moving from hot highs to moderate medium temps, they bring big storms... the US is now in a box, knowing that higher rates cause big losses for foreign holdings... herein lies the big risk to foreign economies (THAT GETS ZERO ATTENTION), since 75% of the world's reserve assets are held in dollars... I expect serious recessions and debt collapses in little countries, and perhaps bigger countries d. the trade gap will not reduce for years, not until the dollar comes down another 15-20%... I expect the US trade gap to become a national dishonor trademark... the Me-Generation is grown up, spoiled, loves "stuff", and loves even more to spend what they dont have... the gap will continue, until 10% of households declare bankruptcy well, this was fun the NC beach is having a respite with some hazy sun long lines to get onto a PC / jim

To: SOROS who wrote (517)	6/18/2002 2:14:19 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

pulse: gold #317.2, dollar 110.28 (wow, bad, serious) the dollar is close to breaking down from 110-111 support base this is serious gold should be running now, but it is not I think the stock rally has distracted the gold window as soon as the stock rally ends, gold takes off and the dollar might break down gold has held remarkably well during the last two days hardly a hint of a breakdown or serious slide in fact, it seems to have consolidated and prepped to run check out the dollar, which is sucking wind bad bad bad quotes.ino.com anything below 110.5 is seriously threatening a breakdown and this is gold's low season wow, Jim (tan like a savage sailor)