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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Terry Maloney who wrote (268466)	11/22/2003 12:56:18 PM
From: orkrious	Read Replies (2) \| Respond to of 436258

'Course what do I know -- I'm just a scared bear. what are you scared of? being a denizen of this thread, I can't imagine you aren't loaded to the gills with that barbaric relic to protect yourself against the coming economic calamity <g> [edit] go blue <g>

To: Terry Maloney who wrote (268466)	11/22/2003 3:49:13 PM
From: Tommaso	Read Replies (2) \| Respond to of 436258

More reading: financialsense.com It is a circuitous problem that offers no easy solutions. If foreign central banks stopped their dollar purchases, interest rates in the U.S. would immediately rise. A rise in interest rates would threaten the U.S. recovery, bond investments would depreciate, and the dollar would fall precipitously. A sudden drop in the dollar would undermine foreign willingness to finance U.S. deficits. America’s twin deficits represent an unhealthy imbalance that cannot be corrected without pain for the global economy, especially here in the U.S. and for the financial markets. There is no easy way out of this mess. How the dollar's adjustment unfolds will determine whether we experience The Perfect Financial Storm or just another hurricane or nor’easter. It is doubtful whether policymakers can supervise and direct a smooth transition. The last time it was tried back in 1985-87, it led to a severe dislocation in the financial markets. Ultimately the adjustment process gave way to a plunging dollar, rising interest rates and major stock market crashes in the U.S. and around the globe. Therefore, controlling the dollar's descent will need handling with kid gloves. How policymakers maneuver this descent could determine whether we experience an abrupt crisis leading to system risks imploding all at once or an orderly and gradual transition. History gives us little hope of a smooth transition. Fiat currency systems always end tragically for all of the participants.