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

To: stockman_scott who wrote (10902)	12/31/2002 9:06:00 PM
From: Jim Willie CB	Respond to of 89467

Siegel makes a great argument, then lapses with a bad one great point that Fed Monetization efforts to keep longterm rates down (e.g. mortgages) will be difficult since FOREX currency markets can quickly and easily override if the USDollar is dropping, then Fed monetization of long bonds will be overwhelmed like swimming upstream in a fast current bad point in expecting Chinese Deflation to cease the Chinese Yuan is not traded in the FOREX instead it is fixed relative to the USDollar, pegged fixed a dropping dollar will have absolutely zero consequence to the relative pricing of Chinese and American goods nada niec piece, Scotty, thanks Siegel is a smart guy he is aware of the challenge to prevent the long rates from rising I expect the long rates to rise, and for mortgage to rise even more in order to offset the delinquency and default risk associated with their loan portfolio as both govt stimulus and Fed action kick into high gear... the FOREX markets will punish the USDollar, rendering most of their work as futile and empty as they sell down the dollar, long rates will rise in compensation remember, the flipside to a dollar is a Trez bond this is not a vacuum here !!! where Siegel completely falls down is in his ignoring the colossal debt levels and threat to job security upcoming Professor Siegel, just what is the effect of household debt now at 107% of income level ??? Sir, will the road to recovery be spotted as drivable only after another 15 million bankruptcies ??? and Sir, as layoffs mount during the Great Car Sector decimation, how will consumer spending be sustained ??? lastly Sir, what cleansing of balance sheets has occurred in the last three years ??? my answers: consumers will cut spending in a moderate but significantly noticeable extent yes, personal BK's will rise well past a half million quarterly for another 3-4 years the Car Sector implosion will become the largest layoff event in our nation's history, much larger than airlines not one iota have balance sheets been cleansed, in fact they have seriously worsened with artificially low REFI mortgage rates that insanely lured households to overspend / jim