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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (223145)	2/21/2003 11:43:41 AM
From: Lucretius	Read Replies (1) \| Respond to of 436258

you cover yet? we're headed higher

To: yard_man who wrote (223145)	2/21/2003 5:30:17 PM
From: GraceZ	Read Replies (4) \| Respond to of 436258

"you are all wrong -- you don't know what ur talking about." Point to the phrase where I said anything like this. You read this stuff in. It seems the statement everyone seems to have taken exception to is, "I'm still waiting for the trade deficit to be a problem." Apparently so are most of the people who responded to me, that is, waiting for the trade deficit to become a problem. I've heard a lot about how it will become a problem or it always becomes a problem, etc. For the last 23 years we've heard about how the foreigners would repatriate, how they would eventually refuse to take the dollar. Meanwhile the entire third world has been essentially dollarized, as well as the former USSR. where's the trade deficit going over the next 6-9 months I don't think you can determine this. Conventional wisdom says that a declining dollar results in fewer imports and more exports but this hasn't happened even while, as Earlie pointed out, the dollar is 20% off it's peak. Why I think this happened has a great deal to do with which countries we increasingly importing from and how the dollar is fairing against those currencies. Also, it has to do with the willingness (and ability) of those countries to cut prices in order to keep us buying their goods. I doubt very seriously CNBC talks about the misallocation of capital, except to the extent that "phooey, I bought such and such a stock and it went DOWN." I was refering to the analyst they had on this morning from GS who was talking about the trade deficit. He voiced the same arguments I've gotten here as to why the trade deficit is bad for the dollar and for the economy almost word for word. What was interesting is he said foreigners would sell their dollars and most likely go to Euros as the trade deficit rose to that 5% of GDP level, but then he admitted that the European economies appeared even weaker then ours, that we had the strongest economy of the major currencies. He didn't mention gold as an alternative if I remember correctly but I didn't listen to the whole thing.