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

To: BEEF JERKEY who wrote (7218)	2/7/2004 12:52:39 PM
From: Jim Willie CB	Respond to of 110194

agreed, a USTBond mountain will have questionable value /jw

To: BEEF JERKEY who wrote (7218)	2/7/2004 1:44:21 PM
From: mishedlo	Read Replies (4) \| Respond to of 110194

U.S., allies disagree over global growth The United States and its major economic allies agree that boosting global growth should be their top priority, but they have serious disagreements over just how to achieve that goal. The Group of Seven wealthy industrial countries -- the United States, Japan, Germany, France, Germany, Italy and Canada -- wrap up their discussions Saturday with a final communique expected to paper over those wide differences. The main topics for discussion at the two days of meetings were how to handle a steep slide in the value of the dollar and America's soaring budget and trade deficits, which the U.S. allies believe represent a serious threat to future global growth. The group also was expected to address efforts to choke off sources of terrorist financing and to bolster the reconstruction efforts in war-torn Iraq and Afghanistan. Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan were the hosts for the talks, which began with a series of one-on-one meetings by various countries Friday and a group dinner Friday night at a luxury resort on Florida's Gold Coast. Hoping to deflect criticism about a budget deficit that the White House announced Monday will hit an all-time high of $521 billion, Snow stressed in each of his meetings Friday the importance the Bush administration attaches to achieving its goal of cutting the deficit in half over the next five years. [what a blatant lie - Mish] Beginning a meeting with German Finance Minister Hans Eichel, Snow called the deficit "large and unwelcome and something that deserves the attention of Congress." The other message the administration was pushing was a belief that faster growth in other countries will do a lot to alleviate a U.S. trade deficit that is also at record levels. [hint: Europe needs to cut rates - Mish] U.S. manufacturers are also pressuring the administration to continue its hands-off policy as the dollar slides in value against other currencies. That development drives up costs of foreign goods for U.S. consumers but also boosts sales of American-made goods in foreign markets and at home. [The US wants a weaker $ - Mish] The dollar has hit record lows in recent weeks against the euro, the common currency of 12 European nations, and is down by a smaller amount against the Japanese yen. Japan has limited the dollar's decline there through record interventions in currency markets to buy dollars to support the greenback. While the United States thought it had a commitment from Japan to lessen the currency intervention, Japanese Finance Minister Sadakazu Tanigaki told reporters that his country intended to continue taking "appropriate steps" such as intervention when it felt such action was needed. Likewise, the United States and Europe were at odds over seemingly subtle word choices in the communique. The United States argued for retention of the "flexibility" that the G-7 endorsed at their last meeting in Dubai, United Arab Emirates, in September. [The US does not want currency intervention. In short more proof it wants a weak $ - Mish] But European officials, who believe that wording has given currency traders a green light to drive the dollar lower against the euro, were arguing for the G-7 to go on record as opposing volatility in currency markets. "The instability of foreign exchange parities is not good for anyone, not even the United States," French Prime Minister Jean-Pierre Raffarin told reporters Thursday in Paris. But Snow has given no hint the administration will accept Europe's pleas. He told reporters this week that currency values were best set in "open, competitive markets" that encourage flexibility and allow for the kinds of adjustments that will be needed to deal with America's huge trade deficit. The tougher U.S. line has come in the face of an unrelenting decline in manufacturing jobs that has seen 2.8 million factory jobs disappear over the last 3 1/2 years and persisted into a 42nd month in January, according to the latest jobs report released Friday. The administration hopes its hands' off approach to the dollar's decline will produce the intended effect of boosting U.S. exports and halting the slide in factory jobs in time to be noticed during Bush's re-election effort in the fall. [Of course it is lunacy to believe that but the idiots running the US think factory jobs are coming back] While economists worry that the dollar's decline could end up harming the American economy if it spooks foreigners into dumping their substantial holdings of U.S. stocks and bonds, so far the fall in the dollar's value has been gradual. boston.com =========================================================== This is too funny Europe wants the US to hike Snow wants no intervention Europe is pissed at US deficits but Snow tells a fat lie about Bush's committment to reduce it. And every idiot economist in the world is worried about everyone dumping US$ at a time they are all bitching 100% in unison that the US$ is too low. Foo funny. This meeting has not accomplished a thing and I doubt it will either. It certainly is not the US$ love-fest that many were expecting. This meeting should be good for gold and silver I would think. It certainly should be bad for the US$ and good for the Eurodollar and Euribor as well. Well another day left I suppose they can try harder to accomplish something. Mish