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

To: Jim Willie CB who wrote (10742)	3/23/2004 6:13:01 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

you seem to focus on simple but correct answers, and show utter disdain for components that might work against your point that is not constructive, even if your view prevails in the short and near term I am trading a trend I am also trading fundamentals (whether or not anyone else believes it) I am also trading stated viewpoints of the FED and from China and Japan. I do not mind arguments that do not support my views but they all say "soon" without giving a reason. Not only do I have the trend on my side, not only do I have stated views of decision makers on my side, I see no reasons presented for me to change my mind. I am open to a logical viewpoint but the fact of the matter is that China is benefitting from this relationship with US consumers. Unless and until someone can tell me why that is about to change just because commodities are going up, I am going to dismiss it just as I dismissed "gold will force the fed", "commodities will force the FED", "bla bla bla will force the FED" when the FED is clearly focused on jobs. Tell me why anyone should listen to these arguments until the trend changes. People have been wrong for over a year on this, and there is no reason why people can not be wrong for 3 more years. Tell me why this can not last 3 more years. you are getting increasingly difficult to discuss with but I respect your views you disagree with me at times you disagree consistently with Russ the deflationary world force is more powerful than we know the Chinese stubbornness is deeper than most gauge on this score we agree loudly I have many agreements with Russ. Eurodollars, Treasuries, and Inflation vs Deflation are where we disagree. However, both if us see the writing on the wall for the stock market, our views on gold seem to be nearly the same, we both think the upcoming crash is going to be extremely painful, etc etc. If you agree that deflation is the force, then why are you arguing for treasuries to get hammered instead of rise? It is not consistant. I am consistant. I expect the next move out of this FED is a rate cut not a hike. I am almost alone in this camp. Perhaps I am alone. If you agree that China is stubborn then once again your viewpoint is not consistant with a RMB float or a repeg. If you know anything about Asian "face saving", they are not going to give into US pressure to repeg ESPECIALLY after they said they would not. That is not their nature at all. So you come along and say that they will soon be forced to repeg, totally ignoring Asian Face Saving, knowing that they do not give into pressure (by your admission above of Chineese stubborness), in short your arguments and reasons presented are not consistant with your own viewpoint. Is it POSSIBLE they repeg soon? Sure it is POSSIBLE. Is it a sucker bet? Yes it is. Can I be wrong? Yes I can? Does it seem likely? No it does not. Not to me anyway. Consider these: Does China move slowly on major policies or not? Does China do things under pressure or not? Has China stated that they are not floating the RMB or not? Do you understand the concept of "saving face" or not? On that basis alone, arguments for China repegging or floting the RMB any time SOON fall flat on their face. That does not even take into consideration other fundamentals. You mentioned that all of China's reserves were tied up in treasuries. That was wrong. I showed you that China had significant (as in 3/4) of their reserves are in US$ so there would be no need to sell treasuries to buy commodities. You totally ignore China's effort to cool thing off by raising interest rates internally. Those rate hikes will take time to filter down. They are not immediate. You also ignore other problems mentioned by Greenspan and others including China about possible affects to China and to international finance if China acts before its banks are in good shape. You think I am stubborn. I think I am being logical. I will go one further and state that your views on this subject are not consistant with your own arguments. I just presented a logical case. If you want to rebut it I will be happy to read it. For the record: You are a good writer and have a nice way with words in your articles. But on this issue, you seem to be taking two sides at once. Pick one and argue it because China being stubborn as you admit, does not go well with the pressure by the US on China to repeg or float. Finally, currency reserves do not show a need for China to sell treasuries, and you laid out ZERO case for China to sell treasures for Eurobonds in light of the fact they are pegged to the US$. Where did that come from? Your turn. Mish