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 : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (49861)	1/8/2004 9:02:06 AM
From: zonder	Read Replies (3) \| Respond to of 57110

I have to agree that twin deficits of the US are a major issue, one that has factored significantly in USD's freefall over the past year. High debts of the US are no secret, either. The luck US has on that front is that there are "natural buyers" for its debt - Central Banks that will buy US t-bills no matter how negative their real interest rates are, in order to support their own currencies relative to that of the USD. CB of Japan has increased its reserves by USD 200 bn to this end in the year 2003 alone. Still, we might not be far from the day when these Central Banks reach the conclusion that USD is too hot a potato to try to hold on its way down, and find better things to do with their reserve money. China recently announced that it will allocate some USD 45 bn of its reserves to two Chinese banks so that they will remain solvent. Others might follow. In short, these problems are very real and dismissing them offhand as "alarmist" is not a reassuring solution.