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

To: Rational who wrote (19548)	12/26/2004 4:47:28 PM
From: Rational	Respond to of 116555

The following two news items show that China holds only about 30% of its reserves in US$. This shows China will likely move towards pegging yuan to euro+dollar if not euro+dollar+yen. BEIJING (AFX) - China's foreign exchange reserves exceeded 540 bln usd at the end of October, Chong Quan, Ministry of Commerce spokesman said in commenting on ... Dec. 23 (Bloomberg) … While China grabs all the headlines, as of October Japan held $715 billion of U.S. Treasuries, a 40 percent increase from a year earlier. (The Treasury statistics on foreign holdings include both official and private investors.) China, whose trade surplus with the U.S. ballooned to $131 billion in the first 10 months of the year, increased its holdings by 16 percent to $174.6 billion.

To: Rational who wrote (19548)	12/26/2004 8:34:25 PM
From: NOW	Respond to of 116555

which tends to keep real estate prices afloat...you might want to rethink that part....

To: Rational who wrote (19548)	12/26/2004 10:06:07 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Excessive global supply of money will keep costs of capital subdued for a long time. This is why there may not be any secular drop in house prices. Real estate prices will drop depending on local economic conditions. If, for example, Bush cuts Federal payroll as indicated by Snow that he would, the Wash DC area house prices will dramatically drop. Loss of personal income will also dampen the rise in housing prices in many areas like midwest. Real estate prices fell in Japan for 18 straight years in spite of Japan FED pumping like mad. Therefore your theory has already been proven wrong. Mish