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To: yard_man who wrote (51960)	8/30/2002 11:49:18 AM
From: JRI	Read Replies (1) \| Respond to of 209892

Good article....I especially liked this line: (Though from the perspective of economic theory these attitudes by private portfolio managers and bankers make little sense, it is a fact that private financial markets now resist investing in emerging countries that are able to outgrow their external debts and seek to invest in a mature country like the US that cannot.)

To: yard_man who wrote (51960)	8/30/2002 1:19:28 PM
From: reaper	Respond to of 209892

tip, thanks for that article. i can't say that i dis-agree w/ the guy. but i believe my point which started this discussion was that a decline in the dollar would not necessarily be INFLATIONARY (please correct me if that's not what we're talking about). Mr. Auerback correctly describes the 'high unutilised resources' in all of Europe, Japan and emerging Asia. which of course begs one question, which is why in the world would investors want to put INCREMENTAL capital into these economies if existing capital is already under-utilized. and which also brings up my primary point, which is that if demand falters in the US, then there are going to be MORE un-utilized resources in the world, and prices are going to FALL. sunk costs (capital) is high while marginal cost (labor and materials) is generally low, giving prices plenty of room to fall further. with about 8% of global aluminum productive capacity already idle, aluminum prices are going to FALL further if US demand wanes. so yeah, the dollar might decline by another 15%, but aluminum prices will fall as well such that the net effect to a US buyer will be no inflation, IMO. Cheers