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

To: stockman_scott who wrote (3954)	8/6/2002 12:06:44 PM
From: Jim Willie CB	Respond to of 89467

USdollar hitting 50dayMA, and bearish stochastic crossover until a series of 90% down days occurs, the bear is on track we are setting up for a vicious decline in dollar & stocks stockcharts.com[h,a]daclyyay[dc][pb50!d20,2!f][vc60][iUb14!Uh15,5,5]&pref=G / jim

To: stockman_scott who wrote (3954)	8/6/2002 2:46:16 PM
From: Jim Willie CB	Respond to of 89467

I think Dow having a FIBRILLATION episode last 5 weeks / jw

To: stockman_scott who wrote (3954)	8/6/2002 3:21:22 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

the economy and the dollar, by oil/mineral expert OUTSTANDING INVESTMENTS, August 6, 2002 U.S. Dollar Could Be Crushed by More Easy Money and Growing Government Debt As we reported to you last week, the U.S. economy generated just 6,000 new jobs in July, or only one-tenth of the jobs that would typically be created. The announcement fueled fears that the United States may be headed for a double-dip recession and drove major stock indexes down. In early August comments from William Dudley, chief economist at Goldman Sachs. in New York, showed unusual candor for an industry that issues rose-colored glasses to new employees. Dudley said fears of a fall into a double-dip recession will push the Federal Reserve into dramatic interest rate cuts of between a half and a full percentage point in the fourth quarter. According to Dudley: "The economy's going to be weaker than the Fed expects, the unemployment rate's going to rise and, in that environment, we think the Fed will want to take out insurance to guard against a double dip." Dudley went on to say that he expects the Fed to lower the overnight bank rate 50 to 100 basis points in the fourth quarter, which could leave it at just 0.75%! Even a quarter-percentage-point cut would put the key rate at 1.5% -- the lowest level in 41 years. The Goldman Sachs call was a stunning reversal from what the brokerage industry had been saying, that the Fed may have to raise rates. In fact, the Wall Street investment bank predicted just five weeks ago that the Fed would raise rates by 50 basis points this year. Economists lowered their growth forecast for the second half of this year to less than 2.5%. Still a long ways from a recession. "With the U.S. economy now back at its stall speed, all it would take would be another shock to trigger the double dip," Stephen Roach, the chief economist at Morgan Stanley, warned clients. "Several such possibilities concern me -- intensified corporate cost-cutting that triggers a new round of layoffs, a credit crunch, a downturn in housing markets, and another geopolitical shock." Bad news about the economy led President Bush to weigh in again, this time making a promise to improve job prospects for the country. "We've got a lot of work to do to make sure people can find work," Bush said before leaving the White House for a long weekend at his parents' home in Kennebunkport, Maine. Translation: more government spending. And the one thing our government does better than anyone or anything else in the world is take on debt. In the 1990s the federal government created $2.8 trillion of new debt -- more than it created in the nation's entire history prior to 1990. Fiscal Year 2000 ended with the highest dollar debt in U.S. history -- despite the Clinton administration promise to post a government surplus. In fiscal 2001 debt was $133 billion more. At the end of this fiscal year government debt will total $6 trillion. When numbers get this huge, it is hard to put them into perspective. But let's try. Federal debt today totals more than $20,000 per American, or to over $80,000 for a family of four -- half of which has been created over the past 10 years. Polyanna economists (and there are getting to be fewer of them), say this is money we owe ourselves, so it doesn't matter. But they couldn't be more wrong. Foreigners control 44% or more of the $1.2 trillion in Treasury bonds and T-bills, double the percent they held in 1990. This puts the dollar in peril on any given day. If foreigners begin to believe that Washington will bail out the economy even if it has to forsake the dollar, they will leave in droves, pushing down the value of the greenback and pushing up the prices of commodities. Even still what if the debt was money we owe to ourselves? We owe it, and it has to be paid. And debt carries interest. That means more must be spent on interest, leaving less money for education, infrastructure and defense. The Grandfather Economic Report series says that since 1988 interest growth alone grew from $214 billion per year, to $362 billion in 2000. That's a 70% increase in just 12 years, and it keeps growing. The truth is that with more spending there are more dollars in the world economy each dollar worth a bit less. This plus the debt pyramid are two fundamentals behind higher commodity prices within the next year or two. Yours for profits, John Myers