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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (5678)	12/4/2002 12:26:56 AM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Insightful comments from Ed Bugos of Goldenbear.com : Currency Rhetoric Truth is a delicate lining, not easily seen except in certain light - Ed Bugos Dollar bulls beat up on the Yen Monday, pushing it back down to October's low after a recent spate of dollar weakness saw it rise back up to September's levels. Not surprisingly, this happened as CRB futures broke out of their three month consolidation to tap the high made in 2000, intraday, but closed one point above their best 2000 close for their best close in five years. I'm not surprised at the coincidence because the selling was seen to be coming from offshore (or U.S.) hedge funds, as opposed to some sort of homegrown panic; and it came on the heels of rhetoric first by Japan's Finance Minister Masajuro Shiokawa who allegedly said that the appropriate level for Dollar/Yen is 150-160 (recent range has been 120-125). Then Dr. Yen weighed in with a warning that Japan's deflation was a risk that's spreading through the global economy. He must mean like in Argentina, Russia, Turkey, Brazil, Mexico, South Africa, Australia, Canada, and like in the US of course, since the PPI and CPI no longer are affected by what's actually going on in the commodity markets (are Sakakibara and Soros working off a debit at Citigroup or something... they sound awful similar in their nonsensical themes these days, though its none of my business!). Of course Shiokawa is a dollar bull too; he works for the government in Japan, and the dollar is their reserve currency just the same. In what has been typical of many Japanese policy statements, Shiokawa later said his comments were misinterpreted. I don't know, maybe, maybe not, but maybe you can make sense of it: Shiokawa was quoted in a Japanese newspaper as saying during a speech in the northern city of Sendai at the weekend that the yen was excessively strong and should be around 150-160 to the dollar. "What I said in Sendai is that the Japanese economy is not weak at all," Shiokawa said. "If you take purchasing power, for example, it shows that the economy is strong." His comments confused the foreign exchange market - Reuters, Dec 3, 2002 Confusion, rhetoric, it all has the same effect, and it tends to be loudest around trouble spots in the dollar's technicals. Thankfully, Morgan Stanley has some sensible comments to say on the subject: Analysts said Shiokawa's range was based on the consumer price index (CPI), but they said the dollar/yen rate has rarely been near CPI-based PPP (purchasing power parity). Part of the reason is that CPI includes non-traded goods. PPP is a way to compare living costs between nations by looking at prices of similar items. The gauge to calculate it can be anything from a hamburger to the CPI. Analysts said using Japanese and U.S. September CPI data, the PPP is now around 165 yen. That means what a consumer can buy for $1 in the United States would cost 165 yen in Japan. But using the wholesale price index (WPI) of final goods for the month, the PPP is around 103 yen to the dollar. And if PPP is based on the most competitive export products and services, what a dollar buys in the U.S. would cost only around 70 yen in Japan - Reuters, Dec 3, 2002 gold-eagle.com