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.

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

To: russwinter who wrote (24245)	1/9/2005 12:34:47 AM
From: NOW	Read Replies (1) \| Respond to of 110194

" I suspect the later will be the outcome" why Russ? if comms are short, why not take it down here for a bit.....?

To: russwinter who wrote (24245)	1/9/2005 6:14:36 AM
From: Haim R. Branisteanu	Respond to of 110194

I see the latest USD run as a game of chicken trying the US treasury hand. IMHO the EZ is also in quite an economic bad shape with huge liabilities piling up (pensions etc.) and little new workplaces generated on top of stable to shrinking population. The only pent-up demand may come from Easter Europe from countries from the former communist block. The key to all this is China and SE Asia IMHO and an appreciation of their currencies would generate new jobs in EZ and support the EUR as their exports into China and SE Asia would be cheaper. At present the market is misreading the weakness in Germany but ignores the rapid economic growth of the new EZ members who are stealing growth form “Old Europe“. In addition the market ignores the new high economic growth players such as Turkey Russia and Ukraine whose economic ties are more closely aligned to EZ than to the US. The development and investment in those countries are rising at a very rapid clip and will drag Germany from their doldrums. IMHO what happened was a play of who will be scared first EZ or US and it seems that the treasury got scared from a to fast USD depreciation and the risk of falling into a new recession due to the need to raise rates to defend the USD and consequently the housing bubble. Net Net trade deficit will shrink more due to an economic slowdown than more jobs generated and the FX reaction would be to a false reading Just wonder how high the MC Banks would be able to drive the USD higher only to slam it down again. My view is a substantial higher volatility in the USD as more and more countries will order their CB’s to change the mix of FX reserves.