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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (1433)	10/4/2003 4:27:40 PM
From: yard_man	Read Replies (2) \| Respond to of 108745

here's a question given your position on the bonds, Jim. If we go into a K-wave deflationary collapse -- what happens to the demand for loans?? If the demand for loans goes down, as does the price of capital goods, people quit borrowing to consume -- what happens to interest rates -- ignoring foreign exchange effects?? Now, let's do something VERY HARD -- let's suppose that there is no collapse for the USD -- maybe just a slow slide, but large amounts of capital vs. imports (which can change as consumers curtail their borrow to spend habit here) stays put in the US. What happens to interest rates under that scenario?? Now let's consider your scenario -- dollar has a sccident -- all at once -- there are marginal flows away from USD assets. Where does that money go?? Where do foreigeners shift the amount of reserves needed to smack the dollar down?? Yen, Yuan ... I can see that the Japanese might shift into Yuan, or that the Chinese might buy Yen or Euros -- but repatriation into terms of one's own currency exposes the monetary inflation for what it is -- empty promises--- so that won't happen, right?? The USD adjustment to date is much larger than most folks realize as you cannot compare it percentage-wise to prior declines -- it's not the same because there weren't so many USD assets held abroad. We've already had a huge shift -- seems to me all that it really means is that monetary inflation has gotten harder and faster for everyone the world over. Our economy is already "Bubble-ized," but now what's happening to the rest of the world?? I think it is possible that the USD crash (in terms of other foreign currencies) may have already happened. Now we are looking for a problem with fiat, in general.