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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (77321)	7/12/2003 2:30:26 PM
From: skinowski	Read Replies (1) \| Respond to of 209892

Most interesting work, Haim. Anyone who read Elliotticians, primarily Prechter, will recall his observation that some of the phenomena which tend to occur during major bear markets are isolationism and trade restrictions. Here, you are giving a serious real-life argument as to why such steps might be necessary. These would not be needed during a bullish expansion. The Fed is trying to inflate its way out of debt by printing dollars. On the other hand, we have at play great deflationary pressures, including overcapacity, cheap imports and growing underemployment. Foreigners buy dollars (as I read) in order to keep their own currency weak and their exports attractive (they dilute their own money by creating it in order to buy dollars). A large part of the newly created American dollars went into the raising real estate prices, and from there - via refinancings - back into supporting the economy (albeit on borrowed money). In the end, what gives? Is the USD going to increase in value due to the deflationary pressures? Or, is it going to collapse into hyperinflation? Could it be that we may see the latter following the former? What do you think would be the optimal scenario, and what do you think will actually happen?