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To: 4figureau who wrote (3632)	3/7/2003 9:50:05 AM
From: Jim Willie CB	Respond to of 5423

WHAT IF THEY GAVE A WAR, AND IT KILLED THE CURRENCY ??? JW

To: 4figureau who wrote (3632)	3/8/2003 10:14:48 AM
From: IngotWeTrust	Respond to of 5423

Commerzbank groundhog watchers wrote this, 4fig: With lower growth and [lower] asset markets, the process of wealth creation transmutes into wealth destruction. The ridiculous economic optimism of early January, based on a literally unbelievable NAPM Survy, has finally evaporated, to be replaced by... >> 3/7/03 Daily Currency Briefing from [Germany's] CommerzBank. on G-7 currencies ------------- --a daily white paper---------------- FX Global Currency Strategy The ECB, SNB, and BoE have all now made their first interest rate reductons of the year. We believe this is the start of a series of cuts everywhere which will take rates down to 'round numbers' over the next few months: Zero in Japan Zero in Switzerland 1% in US 2% in Europe 3% in UK. In all these countries, therates of interest are less directly relevant for the value of their currencies than the underlying economic conditions they reflect. Growth Hopes are Fading: The ridiculous economic optimism of early January, based on a literally unbelievable NAPM Survy, has finally evaporated, to be replaced by a familiar mix of --downward revisions to growth, ---rising unemployement, and ----falling stock markets. The DJIA is down 7.5% FTSE down 9.8% DAX down 14.8% The pain in the financial sector is rippling outwards as firms ---slash capital expenditure plans, ----put recruitment on hold, and -----firmly chop into existing payrolls. If a switch from consumption to savings in the US causes downward revisions to GDP forecasts, then the economic outperformance which is currently expected for 2003 will be less of a counterbalance to worries over the current account deficit. There is no specific level at which deficits trigger a run on a currency, (though the IMF sees a 5% deficit/GDP ratio as important to emerging markets). Instead the key point is the ability and willingness of overseas investors to finance the shortfall in domestic savings over consumption. WIth strong economic growth and rising stock markets, the creation of wealth provides the funds to deficit finance. With lower growth and [lower] asset markets, the process of wealth creation transmutes into wealth destruction. http://www.commerzbank.com/upload/g7dailye.pdf prepared by Nick Parsons: mailto:nick.parsons@commerzbankib.com gold & platinum_tutor