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Non-Tech : Money Supply & The Federal Reserve -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (988)	8/24/2003 11:28:46 PM
From: Rarebird	Respond to of 1379

<Not sure what purpose it serves but it is obvious that exchange rates are not fluctuating based on actual flow of funds or fundamentals like trade deficits,budget deficits or real GDP growth.> As long as this rally in the USD continues, the funders of the US trade deficit can breathe a little easier about their GIGANTIC stash of Treasury debt instruments, since the decline in the capital value of the debt paper is being compensated for, to some extent, by the increase in the Dollar. The problems will REALLY start when the $US stops rising and starts falling again, an outcome which is absolutely guaranteed as the trade deficit and the federal government deficit keep on getting bigger and bigger. Right now, "everything" in the US - stock markets, bond yields, currency, and gold - are going up together. That can't last. Since in reality, the factors which forced the $US to those June lows have not improved but have become worse, the $US rally is living on borrowed time. So is the subdued $US price of Gold.