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

To: BubbaFred who wrote (4367)	12/5/2003 9:49:26 AM
From: Jim Willie CB	Respond to of 108616

China peg provides numerous direct effects in my view: - certain continued hemorrhage in trade deficits, which are growing at 15-20% per year, and is now at an annual rate of $120 billion... as long as all Asian currencies are relatively unchanged (notwithstanding JYEN 5% move), the trade deficit will continue to resemble a hemorrhage - certain JYEN rise, as China's expansion uses Japanese hightech equipment (one generation ahead of US), thus making for a combined Jap surplus and US surplus for Chinese trade, which gaurantees a JYEN upward gradual explosion (which I expect to get to 120 next year perhaps, or 84 in DollarYen) - certain continued EURO rise, since the outsized Asian surpluses are now being diversified, even as the US trade imbalances are not being corrected AT ALL, AT ALL, AT ALL, heading to the EURO since the USDollar status as world currency reserve is slowly being transitioned into the EURO - gauranteed protectionist trade war with China since we are grappling with lost jobs and they are grappling with expanding industry, in order to counter social unrest, which will reduce our retail consumption, and reduce Asian credit supply, thus driving up our interest rates just when Asian import prices rise China will repeg only when they are willing to foster a recession, which will be a healthy correction at the same time, their controlled recession will force a painful and damaging US Economic recession which will gather force and enter a vicious cycle never seen before the outcome will be a USDollar death spiral, a harsh economic recession led by a serious real estate correction, and a GOLD EXPLOSION clown economists will expect the USDollar to stabilize IT WILL NOT STABILIZE SINCE ALL INTERNAL AND EXTERNAL MECHANISMS HAVE BEEN DISMANTLED we have no substantive export mfg base we will actively fight higher longterm rates with monetization the gold bull market is entering the incredibly favorable phase#2 as the bond market falters (as PIMCO's McCulley expects) the safe haven pedestal position will gradually be ceded to GOLD GOLD GOLD the process goes from USDollar to EURO to GOLD and we repeat the 1970 late in decade phenomenon this gold bull will be hilarious in certain respects SINCE MANY GOLD FOLLOWERS WILL MISS IT !!! / jim