Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (22488)	11/27/2004 6:44:44 PM
From: aerosappy	Respond to of 23153

<<The Asian economies, which have depended upon American trade, will also be severely affected. However, they will recover after a period, but only after considerable political and economic turmoil.>> What makes this broadcast personality (Rense) believe that China and Japan can recover if the dollar collapses? If the U.S does not import their products, their economies will rapidly move to total depression.

To: stockman_scott who wrote (22488)	11/27/2004 9:40:28 PM
From: chowder	Read Replies (1) \| Respond to of 23153

>>> Any thoughts on this perspective...? <<< Yup! It never is about morality. It's always about money. Follow the money and you'll find the truth. The truth is, the invasion of Iraq cost the French and Germans millions of dollars in contracts made with Sadamn. The reason they wouldn't support us is because Bush told them if American boys were going to do the fighting, American companies were going to enjoy the spoils of war. War is nothing more than an extension of politics by other means. Wars are fought for political and economic gain. It's never about morality. That's what you feed an ignorant populace to win their hearts and minds. Follow the money and you'll find the truth. dabum

To: stockman_scott who wrote (22488)	11/27/2004 10:24:11 PM
From: bull_derrick	Read Replies (2) \| Respond to of 23153

First of all, a 40% change in currency does not signify a collapse, which was the term that author used. The yen has traded between 85 yen to a dollar and 140 in my lifetime. Do extreme swings affect economies, yes, but these types of valuation changes can occur and do not signify a collapse. The reality is that the weak dollar is both stimulatory (if you're a Toyota exec, you may increase production in America and cut it in Japan or Europe), and it's also inflationary. Inflation is good if it's profits. It's bad when it affects the supply chain which can lower profits. We have enough evidence of both that the Fed will probably keep increasing rates well into next year, a 1/4 point each turn. As rates increase, foreign investors have a reason to keep investing here. Real rates have 200 bp to make really neutral stance and perhaps the Fed goes up 400-500 bp from here before the rates start to strengthen the dollar and slow economic growth. The labor utilization rate is the one thing Greenspan has consistently worried about in terms of fighting inflation, much more so than commodity prices. I don't believe the chicken-little perspective of the article will be born out. However, given a higher inflationary and higher interest period ahead as a given, certain investments like REITS and long dated bonds are probably headed for correction next year. Many bonds and preferred stocks are trading above par and that won't last when rates go up. On the other hand, if one looked at the value of the S&P as expressed in Euros instead of dollars, which is how one would view the market if one were a European investor, and the US market gets cheaper in Euro terms as the dollar weakens. In Euro terms, the market could go up in dollar terms and stay the same valuation in European terms. I noticed the US markets rallied when the dollar went from the dollar mark to the 1.20 mark previously and wondered if it were due to this effect. I believe the US markets will continue to have a positive bias between now and December because the fund managers have bonus payments on the line. Lingering optimism will probably carry the market higher until early April (with down days thrown in here and there obviously) but I plan to make some major adjustments in March. Having said all of the above, the administration should be more proactive IMHO with the Yuan. A Republican congress could pass an official USD-Yuan exchange rate at more competitive rates and require all US businesses such as Wal-Mart to transact their foreign currency rates through the banking system (and ultimately the Fed) at the US official rate instead of the Chinese official rate. I don't believe the administration would ever do such a thing, however I believe that the balance of power between the US and China is likely to change over the next 10 years if the US isn't willing to become more decisive in making the Yuan exchange rate less stimulatory to the Chinese economy and more stimulatory to the US economy.

To: stockman_scott who wrote (22488)	11/28/2004 2:47:17 PM
From: Libbyt	Read Replies (1) \| Respond to of 23153

Any thoughts on this perspective...? From looking at Rense.com it is a web site where you can buy a UFO Art Calendar or read about how Bush Authorized the 911 Attack, or an article by Helen Thomas, "Condi is a "Monster" a "God Damm Liar". My comment about the article....LOL!!! Some of these writers must also submit articles to the National Enquirer. A quote that sums up my perspective of the article you posted: "Never make the mistake of arguing with people for whose opinions you have no respect." Anonymous

To: stockman_scott who wrote (22488)	11/28/2004 4:44:52 PM
From: energyplay	Read Replies (2) \| Respond to of 23153

Hi Stockman - The article represents one good faction of the IDEOLOGICAL (as opposed to economic) anti-dollar crowd. On the economic side, we see Bill Gross, Warren Buffet, James Grant, Jim Rogers, etc. On the ideological side, we see- Mostly right wing gold bugs, Blanchard, KitCo, Le Metropole crowd The 'moralists' - opposed to either Iraq, defict spending, excessive energy consumption, or all three Dr. Kurt Richenbacher Often left, pro-Euro, anti-superpower pundits. Your guy here thinks the whole Anglo-Saxon world will collaspse. ******** Reality is different. China buys US Dollars so it can run a 150 Billion trade defict with the US. China buys dollars so Wal-Mart will make thier factories hum. The US is by far their largest customer, and the Europeans won't replace the US. They may decrease their buying. Simmilar situation for Japan. ****** This has been argued before,but the trade defict is not as large as it appears, because of transfer pricing to avoid taxes. ****** The US buys lots of items from Europe which are very profitable for the Europeans. A much higher Euro will hurt this. The Screaming of the Euroepean exporters hs already started. ******** My personal take is the USD drops 10-20% more, then after a month or so , reverses and goes up about 25 5 - a Fibonnaochi retrace. I expect the USD to dip lower than the technical levels mentioned in this article before reversing. Good article here - Message 20805973