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

To: mt_mike who wrote (3761)	8/2/2002 10:12:22 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

nobody cites real problems: credit excess, unbacked US$ /jw

To: mt_mike who wrote (3761)	8/2/2002 10:30:04 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

John Mauldin letter shows change in tone this week his Muddle Thru Economy now looks more like a stall (I had disagreed for weeks with him on this, expecting recesion) this spring he expected the USDollar to weaken but not as much or as quickly as it did this spring/summer (I had disagreed for weeks with him on this, expecting hard decline, but I often too extreme) it is very scarey for me to disagree with Mauldin for most of the spring I expected my view to be mitigated, with Mauldin's prevailing this is both a boost to my confidence and ego but disconcerting that a real pro could be underestimating the damage NOW FOR OUR NEXT DISAGREEMENT and believe me, I bow to Mauldin left & right I just think the dollar situation is far more untenable for the entire US economy and bond market he has a great grasp of many details, but might be underestimating the Dollar issue I think it is the story of the year, bar none it might be the story of the decade a steadily declining dollar could breed an endless recession Mauldin does NOT expect the USdollar to decline much more "VERSUS WHAT?" he asks when the Japanese are actively trying to weaken the Yen when the European economy aint in great shape either I maintain my disagreement with Mauldin he is very practical, and that could be his weakness when the Europeans see increasing evidence of US economic recession, they will sell the dollar in large numbers they will protect their capital when the Japanese see their large USTBond holdings at risk, more than just from dollar risk, but from rate risk, they will sell the dollar in large numbers they will protect their capital I yield to Jim Puplava the dollar is soon to experience a worldwide crisis it will fall versus everything, and that eludes Mauldin it wont fall versus then yen specifically it wont fall versus then euro specifically THE USDOLLAR WILL DECLINE VERSUS EVERYTHING foreigners funded our entire for over a decade but they are realizing we consume 75% of the world's savings!!! and our corporate leaders are often corrupt and our profligate spending on military is overdone and our federal deficits might get out of control this is a momentum issue a falling dollar breeds more effects that lead it to fall further like imported inflation like foreign selling of TBonds, raising rates and choking stocks and the recovery I have yet to see Mauldin mention a significant historical effect pushing up gold when Real Rates of Shorterm TBills are zero, which means they dont overcome inflation, or remain near zero, for a long stretch of months, this sets off a departure of conservative bondholders from Treasurys into GOLD we have had a Zero Real Return on TBills for a year now so the GOLD complex might rise even more than from just the USdollar decline!!! THIS IS THE BIG POINT I HAVE MADE FOR MONTHS THE DECLINING USDOLLAR IS THE TRIGGER OF A VICIOUS CYCLE I dont believe Mauldin fully grasps its horror he is far more successful than this lowly analyst but I might drive a better car / jim