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

To: T L Comiskey who wrote (1668)	7/8/2002 9:56:51 PM
From: t2	Respond to of 89467

The high was about 1.2 near the peak of the bubble. the low posted near the bottom of the 1998 meltdown was about .9. Now about 1.06. But the big problem with the dollar is that the US is so heavily dependent on foreign capital. People who argue that the US stock market soared as the buck plunged in the mid 1980s fail to memtion that the US was much less dependent on foreign capital at that time. And stocks were a lot cheaper then. This is what has always puzzled me; dollar dropping can be good for stocks. Even though things seem different now, one always has to worry about a repeat. Have to remember that although PEs were lower then, interest rates are lower now. The hard part is trying to figure out the effects of high foreign ownership of stocks. That is why long gold stocks or shorting dollar with forex trading might be a better bet ..than shorting the stock market in a falling dollar environment. My belief is the stock market SHOULD go down but I feel much more confident that the dollar WILL go down. About the range of .90 to 1.20..That gives one a pretty good downside target on the dollar..down to about .90; Dollar index might overshoot to the downside too. This is also why I follow the bond market closely; when bonds start selling off, that could mean money MIGHT flow into stocks (especially blue chips). As long as bond market is doing OK while dollar drops, stocks can keep going down. jmho