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

To: mishedlo who wrote (7331)	2/8/2004 12:13:13 PM
From: gregor_us	Read Replies (3) \| Respond to of 110194

Mish: Perhaps it's Time To Get Bold Here... ...and predict a Rate Cut by the Fed in 2004, from 1.00% to .75% There. I said it. Who's with me!

To: mishedlo who wrote (7331)	2/8/2004 12:22:04 PM
From: Jim Willie CB	Respond to of 110194

thinking... yours seems the Liquidity Trap view (yes?) / jw

To: mishedlo who wrote (7331)	2/8/2004 12:24:51 PM
From: Jim Willie CB	Respond to of 110194

U.S., Allies Reach Compromise on Dollar Sat Feb 7, 6:43 PM ET By MARTIN CRUTSINGER, AP Economics Writer BOCA RATON, Fla. - The United States and its allies softened differences Saturday over whether to let the dollar fall freely under market pressures or prop it up with government intervention. A joint statement allowed all sides to claim at least partial victory. The Bush administration won support for retention of language supporting "more flexibility" in exchange markets, a phrase first used by the Group of Seven wealthy countries last September. The G-7 endorsement of flexibility has been interpreted by currency traders as giving them a green light to push the exchange value of the dollar lower without fear that the United States or other members of the G-7 would try to fight the moves with massive government intervention to brake the dollar's decline. The administration is counting on a declining value of the dollar to boost U.S. exports by making them cheaper on foreign markets. Stronger export sales are expected to lift the fortunes of America's battered manufacturing companies, who have been forced to lay off 2.8 million workers over the past 3 1/2 years. But to meet complaints of European countries that the dollar's decline has been too rapid and too severe and is threatening their companies export sales, the G-7 inserted a new phrase expressing concerns about "excess volatility and disorderly markets." Europe hopes that phrase will serve as a warning that some countries may be willing to intervene in currency markets to fight too large a decline in the dollar's value in coming months. The compromise language was included in the final communique issued at the end of two days of contentious talks over the best approach to take to deal with a dollar that has slumped to record lows in recent weeks against the euro, the common currency of 12 European countries. "We all agreed to it," Treasury Secretary John Snow told a closing news conference in response to a question about the language involving currencies. "We all found it appropriate." The G-7 countries — the United States, Japan, Germany, France, Britain, Canada and Italy — proclaimed that the global economic recovery has "strengthened significantly" in recent months. The finance officials endorsed continued cooperative efforts to promote sustained global growth and pledged support in efforts to cut the foreign debt burdens of war-torn Iraq (news - web sites) and Afghanistan (news - web sites). The communique also urged Argentina, currently involved in contentious negotiations with its creditors and the International Monetary Fund (news - web sites), to push ahead with the economic reform program endorsed by the IMF and "engage constructively" with the creditors who hold more than $80 billion in loans the country defaulted on in 2001. Commenting on the compromise language on currencies, British Chancellor of the Exchequer Gordon Brown said, "The agreement is one that is not just unanimous, but one people are very happy with." Added German Finance Minister Hans Eichel: "It is important that the exchange rate ... reflect the fundamentals and that we don't have abrupt changes because that would be harmful for the growth of all, even if there are short-term advantages." A small group of demonstrators outside the Florida resort where officials were meeting chanted "Stop Corporate Greed" and held up signs urging "Deep Six the G-7." Snow told reporters that he was pleased the G-7 had issued a progress report detailing actions being taken by all countries to boost global economic growth under a U.S.-backed "agenda for growth" initiative. For the United States, Snow gave credit to a new round of tax cuts that President Bush (news - web sites) pushed through Congress last summer, which Snow said had helped put the United States "on a path to sustained economic growth." But he said the administration realized more needed to be done to revive an economy that has sustained a number of shocks. "We are not by any means satisfied. We will keep working until every American who wants work can find a job," Snow said, echoing a refrain that Bush often repeats in his appearances around the country. Snow said in his discussions with the other G-7 countries he stressed the administration's commitment to cutting the deficit in half over the next five years. The administration last Monday issued a new budget that dramatically raised the deficit estimate for this year to a record "$521 billion. The G-7 communique urged all countries to strengthen their programs to choke off the flow of financing to terrorist groups. On Iraq and Afghanistan, the G-7 countries welcomed the efforts being made to boost economic growth in the two nations and called on all nations to join in reducing the foreign debt burdens of the two nations to give them a better chance at an economic revival. The finance ministers and central bank presidents of both Iraq and Afghanistan made presentations to the G-7 on Saturday. They told reporters they were making good progress in rebuilding, but needed help in the form of debt relief and financial aid from wealthy nations. Russian Finance Minister Alexey Kudrin said his country was prepared to forgive around 65 percent of the $8 billion of debt Iraq owes Russia not counting interest payments. Britain's Brown said his country was prepared to forgive the "vast majority" of the debt Iraq owes Britain; he did not give a specific amount. Afghan Finance Minister Ashraf Ghani said his country would seek pledges of an additional $28.5 billion in aid and reconstruction financing over the next seven years at a donors' conference of wealthy nations to be held in Germany in March. story.news.yahoo.com