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

To: Crimson Ghost who wrote (4686)	1/9/2004 8:01:57 PM
From: NOW	Respond to of 110194

"they" have no say in it whatsoever. "they" simlply watch the evening news as Darfot has said

To: Crimson Ghost who wrote (4686)	1/9/2004 8:26:24 PM
From: mishedlo	Respond to of 110194

dailyreckoning.com But what's this? The dollar fell again...after a one-day rally. Gold rose $2.10. And now it appears that the kindness of strangers has reached its limit. They are voting with their feet. "An ominous harbinger for U.S. financial assets," writes our friend Terry Reik of Clapboard Hill Partners, "has been the stunning collapse in foreign-capital flows...From a peak of $110.4 billion in May, net foreign flows have fallen to $90.6 billion in June, to $73.4 billion in July, to $49.9 billion in August, to $4.2 billion in September." September's net inflow, Terry explains, is only 10% of the monthly minimum required to fund our $500 billion current account gap. Private interests overseas have forsaken the dollar in favor of other assets. So far, only central bank buying of dollars - or, buying U.S. dollar assets, such as Treasury bonds, thus lending money to the Bush administration - has kept the dollar from destruction. In September, for example, while the rest of the world was dumping dollar assets, the Bank of Japan was spending $40 billion to support the dollar. "Without this Herculean effort by Japanese authorities," Terry continues, "foreign flows would have been an unthinkable negative $35.8 billion." This apparent bout of sanity among foreigners comes at a bad time. For every passing day, Americans seem to need more credit just to stay in the same place. Again, Terry reminds of the numbers: credit grew at a $2.2 trillion annual rate in the first quarter of 2003...and then exploded at a $3.3 trillion rate in the second quarter. Debt has reached $33 trillion, with annual interest of nearly $2 trillion - even at today's Eisenhower rates - and it's growing seven times as fast as the economy itself.