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

To: justwhatuwant who wrote (4950)	1/13/2004 3:56:48 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

What does PBOC stand for? Thanks mish

To: justwhatuwant who wrote (4950)	2/2/2004 10:02:51 AM
From: Rarebird	Respond to of 110194

<Gold, IMHO, is just another currency. I mean, US$ is risky> Real Risky, to say the least. I think the US economy is a bankruptcy waiting to happen. That's the prime reason why I'm still holding my Gold. Japan is spending enormous sums of money to try to stop the Yen from rising against the US Dollar. Japan cannot keep this up. Fundamentally, nobody on earth can do this without running the grave risk of their own monetary and financial system blowing up, in the process causing untold financial and economic dislocations and real economic damage to their own economy. If these absurd currency interventions keep going on for the rest of this year, Japan could be standing with about $US 1 TRILLION in US Treasuries. China, even at its current rate of US debt take up, could end up holding between $US 300 Billion and $US 350 Billion in US Treasury debt paper. This is all mind blowing stuff, but not many people care right now. They'll care when this currency intervention stops. How will it stop?? Simple - one (both?) lender to the US will go flat broke in the process of doing the lending. When this lending to the US stops, the US financial system will get the shock of a life time, almost the equivalent of the unplugging of a life-support system. An international cessation of lending to the US will act as a global financial ice breaker because it will identify the US as a GLOBAL CREDIT RISK. Once that happens, the pretensions of the US Dollar to function as a global "reserve currency" will simply fall through the cracks in the ice and sink without a trace.