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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (1560)	10/18/2003 3:35:53 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 110194

My view is that this administration is playing with very dangerous issue at a time that they are clue less as to the various ramification and implication of forcing a lower USD. The ECB is in no way in a better position. Therefore we are at the mercy of criminals employed by the big banks and other shadowy characters running hedge funds. If the ECB or the US administration had a clue of what is going on they would clamp down on those criminals but due to " free market mantra" they let those criminals embezzle the real business that are the real economy. The USD should soften slowly at a rate of 1 to 2% a month until it will reach some equilibrium between economic GDP growth and trade and budget deficit. The EZ countries will stay around current budget deficit between 3% to 4% and a lower USD will hurt their exports but lower their inflation to around 1.5% from present 2% China will have no choice but to appreciate their currency as will India and other SE Asia countries by next spring As the US is more flexible with a revival of the world economy the US would narrow the two deficits, which will be supportive for the USD at lower levels. IMHO UDX at around 85 may give the answer. JPY at 100 and EUR at 1.20 to 125. But that should happen within a year not a month. It is about time that the US and the ECB should intervene in FX market to stabilize the FX rates the way Japan is defending it's currency. Stability in FX is positive for economic growth not fluctuation induced by the big banks who are the only one benefiting from volatility as real business need s to hedge the risk. Treasury Secretary O'Neil was right when he mentioned that those shoddy types at the big WS and commercial banks must be forced into financial oblivion. Unfortunate he paid with his job for this wish.