Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (20581)	9/16/2003 9:06:01 PM
From: LLCF	Read Replies (2) \| Respond to of 39344

<If one looks long term at the health of the US economy versus that of Europe how can anyone be so down on the dollar. The current pain of the creative destruciton from the recession will lead to an economy that evolves. Germany and France are simply unable to do that. Who would you invest in?> There are several points: 1.) The analysis needs to be dynamic, not static. There is tons of reform potential in Europe with possible release of value. Not even close in the U.S. where, if anything, one can argue that there is lots of potential for a backlash and a retaking of labour's share of the economic pie. 2.) The dollar is just a piece of paper... if it is printed at a faster rate than other pieces of paper, it will [ceteris paribus] devalue vs those. 3.) Continuing with #2, the dollar has been accumulated as a reserve asset... something to hang onto... this has held up the value over time. There has been much written about the increase of dollars in reserve... ie. a potential flood of selling... OR SIMPLY A SLOWING OF ACCUMULATION... both would lead to lower dollar with current account situation. ie. the arguement about or 'great economy' is only a small part of the equation. Remember also that the economic statistics probably overestimate US growth and understimate eurozone growth. DAK

To: Bearcatbob who wrote (20581)	9/17/2003 8:41:14 AM
From: austrieconomist	Respond to of 39344

BEGBX. I'll get my disclaimers up front. I have previously posted here on this fund investing primarily in euro country government bonds. I drastically cut back in the weight of this fund in my portfolio in June/July because (1) based upon John Hussman comments, I believed the euro had reached fair value with the dollar at about 1.15, and (2) while euro rate dynamics were slightly different than the U.S. markets, based upon Richard Russell comments, I believed the top was in on Western debt instruments. Having said all that, the EEC does not run current account deficits of 5%-6% of GDP as does the U.S. The superior economics of U.S. market forces cannot overcome this structural problem indefinitely. So there is a case to be in the euro. However, the better bet, long term is gold in a worldwide competitive currency devaluation environment. At the time of the BEGBX downgrade in my portfolio I shifted assets into (with the assurance of comments from Marc Faber) MACSX and SJPNX (Asian and Japanese stocks mutual funds). The currencies of SE Asia will also appreciate relative to the dollar.