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

To: Haim R. Branisteanu who wrote (7231)	2/7/2004 2:59:52 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

They can "seek" a consensus that the $ should be stable but so frigging what? What are they willing to do about it. They want China who is not even there to do something about it. Exactly what good does it do for them all to agree that China should unpeg, or that the $ should be stable. China will do what it wants when it wants, and if the US$ starts sliding as it should on our budget and trade deficits then who is going to stop it by having a "concensus that we should stabalize". My belief is that words without actions will make the situation worse. They might as well not even bother agreeing IMO. Most likely Japan will be buying US$ right after the frigging meeting! M

To: Haim R. Branisteanu who wrote (7231)	2/7/2004 3:16:10 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Let the dollar drop economist.com Let the dollar drop Some think the dollar has fallen too far. On the contrary, it has not fallen by enough. OK - I agree The US$ should drop. The problem is what does that do to European trade? Then the writer goes on to say: In essence, Asian governments are buying American Treasury bonds in order to ensure that Americans can afford to keep spending money on Asian goods. This cannot go on forever. Despite their mercantilist instincts, sooner or later Asia's central banks will have to face the fact that they are holding far too many risky, low-yielding dollars. If they stop buying, it could trigger a sharp fall in the dollar and a jump in bond yields. This sure seems contradictory. OK he wants it all at once now, but bitches about a sudden plunge later. Seems silly to me. If the problem is they are holding too many US $ and treasuries then why don't they just stop buying them? That is the problem that he does not address. Nor does he understand why. The why is to keep US consumers buying low priced junk and their currencies competitive. This part is surely correct: The euro area is also far from blameless. Policymakers wring their hands about the “brutal” rise in the euro, yet the euro is still close to fair value against a basket of currencies. If Europeans are worried that a stronger euro will hurt their economies, then the solution is simple: the European Central Bank should cut interest rates to boost demand. Mish