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

To: ild who wrote (1652)	10/25/2003 5:03:48 PM
From: Haim R. Branisteanu	Respond to of 110194

Dollar may hurt US growth - OECD October 24, 2003 By Sapa-AFP Paris - The decline of the dollar could slow the pace of the US economic recovery by leading to a rise in US long-term interest rates which would in turn weigh on domestic demand, the OECD said Friday in its semiannual Financial Market Trends report. The Organization for Cooperation and Economic Development said Asian governments had been major buyers of US assets as part of their strategies of preventing their currencies appreciating against the dollar. But after the recent call by the Group of Seven rich nations for greater exchange rate flexibility - widely seen as a call for Asian countries to allow their currencies to strengthen against the dollar - these official purchases of US assets may decline, the OECD said. "Should such purchases now come to an end, the pursuant fall in demand for US treasuries could increase US interest rates, assuming private demand for US assets does not offset the drop in official demand," it said. The weaker dollar could therefore have negative, as well as positive, effects on the US economy, it said. busrep.co.za

To: ild who wrote (1652)	10/27/2003 12:27:10 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 110194

we are beginning to see bigger effects from retired debts, defaulted debts, delinquent debts many cases of home equity debt and refi's covering credit card debt but that is a net money supply wash equal new offsets equal retired with car sales down 35% in October y-o-y, plenty of reduced incoming debts the Monetary Futility Index is rising that is what I call the amount of new money & debt to generate a single dollar in new GDP Richebacher calculates it as 7.0 now it was 6.5 in midsummer it was 5.0 last autumn, I believe I fully expect this index to hit 10, maybe higher, as we trudge down the same disastrous path as the Weimars did in the 1920's but the outcome will be so much different, with Asian overproduction and misallocated resources left & right across the globe like a stall in an airplane, the engine cannot take on continued pressure for fuel supply flow to the engine is interrupted less fuel flows sis boom bang we will earn price inflation mixed with price deflation shrinking corporate profit margins, shredded household budgets damn, this gonna be fugly I have been emphasizing two critical absent mechanisms for months now no monetary mechanism of imminent higher rates to encourage foreign investment in US$, since the Fed is forbidding higher rates, capping rates, monetizing bonds no industrial mechanism for promoting greater exports abroad, since the industrial base was itself exported, making Snow's overtures to China absolutely and positively tragic and ludicrous as Noland says... The Fed and market players apparently believe that the dollar will calmly find some level commensurate with fair value. But low rates and Credit Bubble dynamics dictate dollar devaluation as far as the eye can see. Such dynamics simply beckon for an eventual run on the dollar. And such a scenario would quickly overwhelm global central bankers already with massive dollar holdings they don’t know what to do with. I believe acute dollar vulnerability is here for the duration: A True Paradigm Shift in Global Finance, and certainly not one for the faint of heart. / jim