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To: reaper who wrote (245556)	6/13/2003 1:04:14 PM
From: Perspective	Respond to of 436258

I sure wish I shared your conviction that the Fed's claims are toothless. It seems to me that they are the keeper of the world's dominant currency, and if they are foolish enough to begin outright purchases of long bonds, they can take rates further negative. That idiot Bernanke has even mentioned outright purchases of gold. I still think that the Fed might be able to trash the currency if it wants. And while there might be enough price elasticity in finished goods such that import prices don't track a declining dollar, I suspect that the same elasticity just doesn't exist in commodities. The lower the capital intensity, the more the commodity tracks the costs to produce it. If the cost declines even slightly, supply quickly disappears. The lower the capital intensity, the stickier the price, and since we import a lot of commodities, the dropping dollar may have more importance than one might otherwise believe. BC

To: reaper who wrote (245556)	6/13/2003 1:22:50 PM
From: marginmike	Read Replies (2) \| Respond to of 436258

isnt the TNX telling us that Inflation aint going to happen?

To: reaper who wrote (245556)	6/15/2003 4:03:06 PM
From: NOW	Respond to of 436258

"Greg Weldon noted Tuesday that the BOJ has been aggressively buying stocks. From a point of zero in December, they have now purchased almost half (1.4 trillion yen) in less than five months. Not surprising, the Nikkei is up 17%. Dennis Gartman noted yesterday that Japanese banks are becoming reluctant to sell, as they see the BOJ physically pulling stocks upward and want to sell their shares at higher prices. (You can subscribe to Weldon at www.metal-monitor.com . ) Weldon goes on to note that The Bank of Japan is also monetizing the national debt, purchasing 45 trillion of government debt in just 5 months, which is an annual rate of increase of 20%! Then he gives us this hat trick of analysis: bank lending over the last year has dropped 2.2% and is dropping at an accelerating pace. All that liquidity is still not finding a home in the loan portfolio. Deposit growth at banks is non-existent, down sharply from just April. Finally, there are HUGE outflows of yen leaving Japan and buying foreign currencies, bonds and stocks." Maudlin