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

To: russwinter who wrote (22074)	11/20/2004 2:36:05 PM
From: Kailash	Read Replies (1) \| Respond to of 110194

As Eeden points out, if Japan stops (has stopped) supporting the dollar (http://www.kitco.com/weekly/paulvaneeden/nov192004.html), China can't do it alone. The Texas Hedge Report quotes the Chinese ambassador saying they're moving in the direction of diversifying out of the dollar. The investment question is how fast this will happen. Asia has been supporting the dollar for years; why would they just let it drop cold turkey? Japan says they'll keep the yen from rising -- what's not to believe? And how fast can interest rates rise in the US? There's of course a possibility we'll get a collapse but the dollar has fallen so far so orderly, and everyone's interest is at stake, that I don't think this is a likely bet. If we don't get a collapse, we should get a continued decline for a while, as Asian support continues to moderate. In the meantime, gold will rise. kitco.com I don't see a case for a rapid turnaround in the dollar. We've just had a huge dollar bounce that lasted nearly a year and we're still in the upper part of the downward channel. We could easily fall into the low 70s before we reverse, even high 60s. stockcharts.com[h,a]daclyyay[df][pb50!d20,2!f][vc60][iUb14!Uh15,5,5]&pref=G This is going to be an extremely painful transition and I don't see this Fed raising interest rates any faster than they think they absolutely have to. And how exactly is Bush going to cut the Federal deficit? Russ, I think you have a tendency to compress events. How about being right and giving it the full amount of time it's going to take to happen? Cheers, Kailash