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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (16613)	11/23/2004 9:08:50 AM
From: russwinter	Read Replies (3) \| Respond to of 116555

From Daily Pfenning: Recall last week when I gave you that breakdown on Russia, and said that if they were going to denominate their oil contracts in euros they would probably want to change the mix of their FX reserves to a higher base of euros? Well... Right when the dollar looked perky overnight, Russian Central Bank deputy dog Ulyukayev, (don't try saying that with your mouth full!) came out this morning and said, "Most of our reserves are in dollars, and that's cause for concern. We are discussing the possibility to change the reserve structure." You know, I forgot to mention yesterday when I was telling you about Greenspan's comments regarding foreign investors becoming "satiated" with U.S. assets, and that their appetites will become diminished that this is the point that I've been trying to make for months now! Foreign Central Banks are the only ones coming to the auction table to buy U.S. assets... And pretty soon, they are going to demand a lower "clearing price" (the dollar) to increase their already abundant holdings of U.S. assets! One thing of note, besides Big Al's appetite, that came from the G-20 meeting this past weekend was the finance ministers and central bank governors calling on emerging Asia to take "steps towards greater exchange rate flexibility, supported by continued financial sector reform, as appropriate." Once again this is directed at China, but spills over to other Asian countries with "fixed currency rates" or manipulated currencies, with controls, etc. And I think this is going to come in 2005... Look at how the Japanese have backed away from the intervention table so far... Look how the other "floating" Asian currencies of Thailand and Singapore have recently begun to move higher... It's coming...