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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 (16511)	7/14/2004 2:47:54 PM
From: Haim R. Branisteanu	Respond to of 110194

FOREX boys are always making the money right or wrong - they move the market and make the markets. IMHO some were it will break - wonder what the ECB will do then

To: Jim Willie CB who wrote (16511)	7/15/2004 4:27:52 AM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 110194

Was thinking about our debate related to the value of the USD and the weak fundamentals of the currency, what is ignored and please think about it is the perception factor and popularity. How many people in the world can understand the relationship between the strength of a currency and trade deficits and budget deficits ? - a very small percentage IMHO How many people in the world can understand the power of the US military army and are reading about that in the news papers ? - (or or Hollywood or PC which still symbolize the US?) - a very high percentage IMHO Lets see - S. Korea or Taiwan - who is standing against their mortal foe? the US - who has military might patrolling the waters between China and Korea or Taiwan or around the Philippine and Indonesia or even India? the US - French / Germans / Italians are not even in sight. Who will the ordinary people in those countries trust in case of emergency ? the French ? the Germans ? Holland? Spain? or any other EU country ? - no they revere the US might IMHO Now if those close to 2 billion people (excluding China) would like to have some emergency funds in FX what would they buy ? USD or EUR or other FX ? would they analyze the fundamentals of the currencies ? I do not think so as they do not understand it even. My point is that the US exploits it's military might for economic benefit in every aspect possible including FX rates to live beyond it's means in a very aggressive way. There were publication on the Internet about a big maritime military exercise in the Pacific near China / Taiwan - for sure all newspapers in the area are filled with picture and articles about it - in which currency will the population put it's confidence? in the currency of the French Spaniards or Germans or the currency of the military power that is shown. Yes it affects the FX on the fringes but it is "mattress money" for which the US pays no interest and has a free ride which the US is fully abusing it. Are those holding or buying USD now clueless – yes they are – but no you or I or Buffet or Rubin et-al and all those thinking rationally can not change this embedded mentality . Further the arrogance of Chirac and Schroeder in their quest to conquer economically (after all conquering Europe is a centuries old dream of the French and Germans) Eastern Europe knows it and it does not help to the contrary their efforts generate disdain from Lithuania to Poland to Romania who see forced to join the EU for economic reason but can not stand the France / Germany/ Spanish intrusive and commandeering policies. If the US would start something similar all the CEE countries will abandon the EU in one minute IMHO On the other hand the ECB in their own aloof arrogance “of intellectualism” do not promote aggressively the EUR in either parts of the world as a safe and trusted currency – why ? because they think exactly contrary to the US mentality. IMHO if the European had a bit more brains their currency could easily take over or at least be at parity as a reserve currency but unfortunate they are so much involved with themselves and fighting the US tooth and nail on irrelevant issues that they do not see the great advantage of lending money without paying interest – in summary they are bunch of arrogant aloof and clue less people This is another factor the USD is still at level it still is - and US citizen can spend other people savings and not earn their own life style. my 2 cents BWDIK