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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Harvey Allen who wrote (69202)	4/13/2004 1:56:24 PM
From: Harvey Allen	Respond to of 94695

Roseboro not worried about wavering foreign demand . By Rachel Koning CHICAGO (CBS.MW) -- Treasury Undersecretary for Domestic Finance Brian Roseboro said the United States is not too reliant on foreign investment. He told CBS MarketWatch that he's not worried strong foreign appetite for U.S. bonds could or is already wavering from strong levels. Foreigners hold some 40 percent of U.S. Treasurys and "we don't think that is a bad thing," he said. Roseboro said the Treasury Department maintains its long-term goal of spreading U.S. Treasurys among a broad group of investors, including foreign central banks. Japan has been a solid buyer of U.S. debt, driving U.S. interest rates to eight-month lows earlier this year, as it steadily bought Treasurys with currency-market proceeds. Japan has since slowed its market intervention as the Japanese economy improves. The benchmark 10-year Treasury yield has risen dramatically from those multimonth lows and was trading at an early-January high of 4.32 percent on Tuesday. Roseboro welcomed Tuesday's retail sales data. He said that U.S. interest rates remain at historically low levels but some increase is expected. He said that making Bush administration tax cuts permanent will help sustain consumer spending going forward. marketwatch.com;

To: Harvey Allen who wrote (69202)	4/13/2004 3:07:31 PM
From: Real Man	Respond to of 94695

I think one needs to be careful being long the dollar at this point, although it could probably run to 91-92. fx.sauder.ubc.ca The LT rates increase will bring down the house of cards, one of which is the value of USD. It can go up until the play "currencies run in reverse to interest rates" is in effect. I believe, this IS the game in derivatives, but... when you come to actually looking at who OWNs the US bonds, it's the foreigners. So... the dollar can only go up unless they dump bonds, and, actually continue to BUY them. If only they get scared (and they are in LT bonds, mostly) and sell the UST, you don't want to know how low the dollar will sink... 5 Trillion dollars coming back to shore is a lot of dough. The chart above is 60-day regression showing that the dollar is extremely overbought in a downtrend. I think gold will have a very wild run up, once this decline is finished, quite likely to above 500.