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

To: westpacific who wrote (22992)	12/7/2004 11:54:12 AM
From: gregor_us	Read Replies (1) \| Respond to of 110194

WestPacific: In the Event of Your RE Collapse ...why would the dollar be strengthening during such a development? The dollar is already discounting the debt, deficit growth, and weak economic growth. It's already trading off these facts in a fairly clear, trading relationship. In the event of your RE collapse, the stock market and economic numbers would also be spiraling downwards. Why would these conditions not repel dollar buying? Why would dollar strength occur at that point? My view is that the dollar has only begun to discount the precarious debt, the further growth in the deficits, and a weaker economy in 2005. I would say the index needs to fall much further to create a margin of safety for any new, future Dollar Holders. Probably something towards 70.00 on the USDX. I would also argue the USDX does not fully reflect yet the additional War Spending Bush will ask from Congress in 2005, nor the massive new borrowings for his SS Reform Plan. Even if the SS reform plan goes DOA in late 2005, what market participants can afford to go long dollar positions in the face of such madness? How will the pension fund manager in Europe and Asia explain to his boss USD exposure, as 2005 proceeds into the face of all that I describe, and in addition, your RE collapse? The dollar is imo in a correction process after a period of serious over-valuation. It has only just begun to reflect present conditions, let alone what's coming. All dollar short positions as represented by bets made at the various exchanges are insignificant compared to the money supply. Heck, even compared to debt held by foreigners they are insignificant. When we read that "everyone is betting against the dollar" I would say hardly anyone is betting against the dollar. The world is long dollars. Massively so. That said, Gold may do some wierd stuff in the face of the coming, further decline of the dollar. You may be right to avoid gold. But the CAD, AUD, NZD, EUR, CHF and EUR will not be doing anything unexpected at all. Regards, LP

To: westpacific who wrote (22992)	12/7/2004 12:28:07 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

I think the masses are betting on residential real estate in a cash is trash world and very few have exposure to gold. I've mentioned a couple of times on these thread but no one has taken me up on a scenario where we could have a still steep yield curve that still results in a severe downturn. Say fed funds at 4% and the longer end from 5-30 years at say 7-8% next fall instead of a flat curve? Or could a flattening yield curve that signals recession also bring down housing in the bubble markets? Many midwestern markets already hurting even with mortgage rates near the lows. <Because I feel dollars will outperform gold. Gold will collapse along with stocks and other commodities in 2005. I feel the dollar is going to be a hold because the US will be forced to pay very high returns to attract capital. Also get ready for the biggest real estate collapse of all our lifetimes. IF you still own real estate in the US you are going to get crushed. As rates soar expect defaults galore. Just my 2 cents. Everyone is banking on gold and a dollar collapse. Not I.>

To: westpacific who wrote (22992)	12/7/2004 1:37:53 PM
From: loantech	Read Replies (1) \| Respond to of 110194

<Also get ready for the biggest real estate collapse of all our lifetimes. IF you still own real estate in the US you are going to get crushed. As rates soar expect defaults galore> We owe very little on our home of many years so if the price collapses the tax man will get less. <g> As far as the dollar or gold your bet is good because the dollar has fallen so much and you may be right about needing capital. Most of my mining stocks are total drill hole plays they hit they go up they miss they go down. My wife and I have little debt and enough cash to pay the house off which we may just do in early 2005. Thanks for the interesting post and good luck trading. Tom