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Strategies & Market Trends : Fidelity Select Funds -- Ignore unavailable to you. Want to Upgrade?

To: gregor who wrote (176)	2/15/2003 10:38:37 AM
From: Angler	Read Replies (1) \| Respond to of 5019

Yes, a weak dollar affects all imports and producers from overseas but not greatly over mass merchandise (such as found in Walmart). Recently our purchases of big tins of Spanish black sliced olives went up from US$17.25 cs. to 17.75 cs. because of the exchange. Mostly such prices are affected by supply and demand, competition and crop conditions anyway. Generally the consumers will not see any small blip upwards in an item that is only a tiny component of their ready to eat pizza. Such increases occur all the way through the product lines with little effect on U.S. mgfrs. based overseas many of whom are licensing their brands to foreign factories. I believe the American factories will adjust by raising prices very slightly if needbe. Direct importing multinational retailers like WMT will suppress customer price increases against all odds IMO. The Chinese and South East Asians will continue to produce competitive goods with or without (our) foreign proprietorship, delivering labor intensive items on their own which they have learned to make to our requirements. Some major companies have hedged against abrupt increases by trading the dollar forward also. Their stuff will still land here awfully cheap. Quality apparels that I bought for the store decades ago are available now at 1980 prices. Now I see Nissan Motors with their current "hot" line of cars relocating their first new U.S. plant in Tennessee I believe. So monkey see, monkey do. No matter what happens the consumer seems to benefit from globilization free of high tariffs- may be the most important result - as all third and other world countries compete against each other. The Japanese who are great savers but without gov't. protection for bank deposits up to 100 thousand are deliberate buyers of gold. Their stock and real estate markets are in shambles. Yesterday Mr. Blix did not make a strong case to indicate Saddam's covert hiding of W.M.D. and the stock market went up (in the face of three day weekend) and gold came down suggesting that, perhaps, war may not happen. I think gold sits on one end of the teeter totter and the market image measured by dollars at the other. But world disturbing events still exist in O.B.Laden and North Korea so such can still drive gold and the price of duct tape upwards. Our low interest rates and poor stocks will not encourage foreign interests to load up (or hold) on dollar dominated investments considering the poor and even risky returns. But like the old saw: If nothing changes, it stays the same. As a hedge there still is a case for holding gold I think. Angler