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.

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

To: russwinter who wrote (2651)	11/26/2003 12:21:24 PM
From: yard_man	Respond to of 110194

it's possible that nat gas rallies and the gassers, too, and there is no looking back. very possible. if it happens I may miss that boat for this season.

To: russwinter who wrote (2651)	11/26/2003 3:24:17 PM
From: ild	Respond to of 110194

Thanksgiving – A Lot Of Help From Our Friends As I prepare for this year’s Thanksgiving celebration (more accurately, as my wife prepares, bless her heart), I was struck by a parallel with the first Thanksgiving celebrated in this great land of ours. You recall the story of how Native Americans, who lived near the Plymouth colony, came to be invited to the first Thanksgiving feast, don’t you? The Pilgrims were paying the Native Americans a debt of gratitude for helping them survive their first year in the New Land. In other words, the Pilgrims got by with a lot of help from their new-found friends. Similarly, this Thanksgiving, we are getting by with a lot of help from our new-found friends – not Native Americans, but native Chinese and native Japanese. How so? By their and others’ central banks recycling the dollars we send abroad in payment for our imported goods and services. These dollars are recycled into U.S. government and agency securities held in custody accounts for them at the New York Fed. In the 52 weeks ended November 19, these custody holdings averaged $918.1 billion. This is up $150.8 billion from the average of foreign central bank holdings of U.S. securities in the 52 weeks ended November 20, 2002. This $150.8 billion increase in the 52-week average of foreign central bank holdings of U.S. securities represents about 27% of the estimated $560 billion 2003 current account deficit. This is up from about 13% in 2002. This rise in foreign central bank financing of the U.S. current account deficit implies that the appetite for dollar-denominated assets on the part of private global investors is diminishing at current market prices. If it were not for the fact that foreign central banks have become the buyers of last resort for dollar-denominated assets, the greenback would have fallen even more in value versus other currencies than it has, U.S. prices for goods and services would be higher than they are, and U.S. long-term interest rates would be higher than they are. If it were not for the “kindness” of foreign central banks, we would be sitting down tomorrow to a smaller feast in a smaller house, having arrived at Grandma’s house in smaller car. So, just as the original Plymouth Pilgrims gave thanks to their “foreign” friends, the Native Americans, for their help in producing a bountiful first harvest, tomorrow we should give thanks to our foreign friends, central banks, in financing at very favorable terms the importation of a bountiful foreign-produced “harvest.” The foreign suckers who produced this bountiful harvest for us, however, should be cursing their central banks. All they are getting in return for their hard work is more paper – that is, yuan and yen, which are reducing the value of the yuan and yen they had accumulated before. I guess that’s why we celebrate Thanksgiving and they don’t. Paul L. Kasriel, Director of Economic Research