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

To: Alias Shrugged who wrote (3381)	12/15/2003 8:48:53 AM
From: Rarebird	Read Replies (2) \| Respond to of 110194

<"If central bankers around the world are prepared to print money and to flood the system with unlimited liquidity at the first sign of weakness in the asset markets, then it is difficult to make a very bearish case for either US real estate or US equities in dollar terms> Mike, Japan is doing astounding things to its currency in an ongoing attempt to try to stop it climbing against the US Dollar. They are spending TRILLIONS of Yen holding the US Dollar up. China is now stomping on its credit brakes, desperately hoping to slow down an economy which is plainly out of control. If China cracks first, it will be forced to sell off a very large part of its current holdings of foreign exchange reserves. That means that it will sell US Treasury debt paper and then US Dollars. That will cause both a lower US Dollar and HIGHER US interest rates. If Japan cracks first and gives up trying to hold the Yen down against the US Dollar, the Dollar will fall faster. Once that happens, most of Asia's huge export industries will slow down and then start standing still as the now lower US Dollar finally causes internal US final prices and interest rates to climb. I agree with Faber that the Bush Administration will let NOTHING stand in the way of the President's re-election, even if it means running the US money printing presses 24/7 and requiring the US credit engine to spew out new loans even faster. The 2004 election is the political pivot of the US.