Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: orkrious who wrote (13491)	5/8/2004 12:08:19 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

just hope GUDDEED is soon one thing the dollar has going for it is "liquidity". when you consider how much everything else went up last year, and how much pain holders of various asset classes could feel if their particular asset class starts to crash, the dollar could gain from a liquidity premium. but in the long run, i don't see how the USD can retain significant value, especially since the Fed seems so "boxed in" to the low short-rate environment (virtually ensuring negative real rates on the short end, until there is an intellectual changing of the guard at the Fed, which may be many years after Greenspan retires). but between the present and the prospective GUDDEED future is an uncertain length of time with various asset-class crashes likely imo (thus increasing liquidity premium in the interim), so personally i think it is good to have some liquidity despite the negative real rates--that is, even though real rates are negative, if one thinks that liquidity has a valuable premium (i do), then the negative real rate might be thought of as the cost of carrying liquidity--liquidity itself being thought of in this sense as a sort of "call" on future crashes in asset classes other than USD.