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

To: glenn_a who wrote (16674)	7/18/2004 9:19:36 PM
From: Skywatcher	Respond to of 110194

not flying off the handle..... WASHINGTON -- Foreign investors scaled back their purchases of U.S. stocks and bonds for the fourth straight month in May but continued to snap up enough U.S. securities to adequately finance the U.S. current-account deficit. Foreigners invested $56.4 billion in U.S. stocks and bonds in May, down sharply from $76 billion in April and the smallest amount since October 2003, according to the latest data from the U.S. Treasury Department. Analysts estimate that $45 billion to $50 billion in foreign investment is needed each month to finance the U.S. current-account gap, the broadest gauge of the nation's global trade. It stood at a record $144.9 billion in the first quarter of this year. "There is still a healthy appetite from foreign investors. There is still enough to cover the deficit," said Gerald Lucas, chief Treasury strategist with Banc of America Securities. Even so, the foreign-investment data weighed heavily on the U.S. dollar. The numbers raised questions about whether foreign demand for U.S. assets would hold up amid signs U.S. economic growth may be moderating and expectations the Federal Reserve will continue to raise interest rates, analysts said. Foreign net purchases of U.S. Treasury notes and bonds fell to $21.9 billion in May, down from $35.3 billion in April. Foreign net sales of U.S. stocks totaled $7.6 billion in May, compared with net sales of $1.8 billion in April. Foreign investment in U.S. assets has cooled in part as foreign central banks have purchased less U.S. debt to help hold down the values of their currencies against the U.S. dollar, analysts said.

To: glenn_a who wrote (16674)	7/19/2004 1:27:34 AM
From: Wyätt Gwyön	Respond to of 110194

If they ever stopped, it would be really bad, because then they might have to actually consume more of the fruits of their labor themselves, which they plainly would never want to do. well, Japan has basically shown over the last 30 years that they are willing to run trade surpluses indefinitely and forego consumption indefinitely in order to suppress the yen and prop up the USD (after a fashion). but Japan is in a position where they have too much capacity domestically in the first place, so they don't really need the capital and can afford to play games (other games they play are public infrastructure pork--drilling tunnels through remote mountains to connect hamlets with populations of a few hundred people). by contrast, China is obviously in dire need of capital to build up its shoddy infrastructure, so China cannot really keep pace with Japan in the currency manipulation game. i think China will be the first to fumble in the game of USD hot potato currently being played among the Asian Mercantilists. the guy who wrote that article is obviously clueless. thank god for all the clueless reporters--because they spread ignorance, they help perpetuate and exacerbate pricing inefficiencies in stocks and commodities. without these inefficiencies there'd be no hope of beating the market, so ignorant reporters perform a vital function in the financial ecosystem.