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

To: orkrious who wrote (13786)	5/13/2004 1:55:47 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Thu May 13 2004 12:44 trotsky (morbius@psy-ops) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved it's like a short term fad...a theory that really makes no sense whatsoever once one thinks it through, but sounds seductive to those propagating it because it seems to be something 'new' that no-one had previously thought of. and it sounds a bit off-the-wall contrarian to boot, so the people who wrote the various articles can bask in the glory of an 'important discovery'. anyway, it was in need of debunking. the main determinant of relative values of free-floating fiat currencies remains the amount printed of each. the busier the printing press, relative to the other printing presses, the weaker the currency. interest rate differentials really are only another manifestation of the same process. Date: Thu May 13 2004 12:34 trotsky (Flash, 11:29) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "Is China's economic miracle in meltdown?" this isn't even a rhetorical question...it simply makes no sense, neither as a question, nor as a statement. China's economy has been the FASTEST GROWING in the world in qu.1 this year. what meltdown?? good grief... of course the boom WILL one day turn into a bust, but not when everybody and his auntie is announcing it, least of all when it's done prominently in the non-financial press. by the time the boom turns sour, they'll all believe that nothing can stop it. Date: Thu May 13 2004 12:26 trotsky (Chicken Man, 11:07) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well, what has the Sally in your example to do with the EXTERNAL value of the dollar? strat, and his predecessors arguing the 'debt creates a higher dollar' theory seem to believe that a huge dollar denominated debt mountain means the dollar must rise against the Euro or the Yen. but that is patently untrue, since foreign investors hold TRILLIONS in dollar claims. if the debt edifice begins to wobble, they will SELL those claims and crash the dollar. one only needs to look at Argentina - it even had a peg, and in theory every peso was supposed to be 'backed' by a dollar. when its debt mountain imploded, foreigners dumped their Argentina exposure, and the peso ultimately crashed in spite of the peg. Date: Thu May 13 2004 12:19 trotsky (kapex, 11:06) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved 'electing to play by the rulse' is a strategy that is bound to fail at the crucial moment. sort of like LTCM in reverse - their models 'proved' that a certain strategy ( yield convergence ) was correct 98% of the time, and with big leverage could be parlayed into a handsome ROI. it worked for exactly 4 years, UNTIL the crucial moment came along. Date: Thu May 13 2004 12:15 trotsky (frus@repos) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved they always do that when it looks like the stock market might fall out of bed. Bolser has constructed an interesting chart that shows the correlation quite clearly...and monetary policy expert Mr. Moto has often remarked on the connection as well. the Fed's main job these days is bubble-juggling. Date: Thu May 13 2004 12:12 trotsky (Winston, 11:02) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "A leading member of the Saudi royal family warned yesterday that the aim of groups behind a series of deadly terror attacks in Saudi Arabia was to overthrow the regime. " gee...you mean they've actually NOTICED what it's all about? interesting that they refer to themselves as a 'regime' as opposed to a 'gummint' or somesuch less fraught with associations term. Date: Thu May 13 2004 12:00 trotsky (Goose, 10:37) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i actually agree, and it is true that statists around the world still fear gold for the very reasons you mention. so i agree that e.g. central banks will always communicate their gold market dealings in such a way that they have a negative connotation ( like e.g. announcing every sale as loudly as possible, in advance ) . but i don't agree that anyone believes the gold stocks to be so important. they're too small a slice of the securities universe to bother anyone. the metal itself, as a time-tested indicator of the countless failures of socialist central economic planning is a different matter. Date: Thu May 13 2004 11:49 trotsky (the Vet, 10:25) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved you assert: "While Oil continues to rise so will the dollar... Anything else would create too much pressure on the US economy. " this implicitly assumes that there are some nefarious, unseen forces, that actually have CONTROL over where the dollar is going relative to other currencies. i assure you that you are mistaken in this. even when central banks, arguably the biggest players, with virtually unlimited resources, try to manipulate the currency markets they FAIL REGULARLY. for instance, the BoJ has NEVER managed to stem a rise in the Yen, regardless of how much it threw at it. neither has the BoE been able to stem the fall of the pound in the early 90's. not a single Asian CB was able to stem the collapse of their previously pegged currencies in the Asian crisis, and not even the IMF was able to save the rouble or the Argentinian peso. it is totally irrelevant whether what is happening in the currency markets is perceived to be 'good' or 'bad' for an economy , or as you have put it, 'creating too much pressure'. the markets don't care - they will do whatever needs doing.