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To: Little Joe who wrote (4531)	5/24/2003 2:55:51 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 5423

ok, onus on you now China has $110 billion from 2002 in trade surplus with USA alone they announce intentions to go 1/3 1/3 1/3 with USTBonds, EuroBonds, Gold but those are target goals a quick move of 1/3 into gold would drive an oz to $500 fast let's say they will be planning to invest $100 billion they might now go 60-40 into USTBonds over EuroBonds if these two markets are not the only large ones, then what are? where would you put $100 billion per year??? now consider that Japan also has something like $70B with USA alone and Korea has its own surplus and Taiwan ditto and Singapore ditto I am getting smaller here so add it all up and you might get a total of $250 billion a year in US trade surplus, which means dollar-based central bank surplus (it all ends up in their central banks after private shedding) where to put $250 billion per year ??? you just dismiss my point as improbable our credit markets are peerless in this world and no losses so far for anyone in the last 3 years in TBonds these Asian investors dont simply want to find a place to put it, they want a place where it will be safe from quick loss, and safe from having to vastly overpay, only to see its value come back to equilibrium in weeks, showing a hefty 30% loss imagine Asia sets its sights on say Brazilian credit market their entire debt is $140B as I recall that is their whole shooting match with a little over half my argued $250B a pathetic investment, not gonna happen imagine Asia sets sights on owning European pharmaceuticals that might be a big bite on the sandwich of equities a viable sector to be sure, but such an investment would drive up prices 5-fold fast your turn where would you set sights for investing $250 billion each year ??? if you think hard, you will have few if any alternative to US TrezBonds and GSE agency debt keep in mind that the whole world is giving every conceivable economy a big big push into liquidity traps except China, the upstart with low costs and low currency that $250B will not pursue non-debt in the developed world / jim