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

To: mishedlo who wrote (20935)	1/10/2005 4:11:23 PM
From: Haim R. Branisteanu	Respond to of 116555

>>> cyclical factors will be currency-negative when structural US concerns abate.<<< will they ?? and why? after all they conclude UK bubble greater than US RE bubble well did they check NYC, LA or other "hot" US RE markets?

To: mishedlo who wrote (20935)	1/10/2005 4:15:26 PM
From: gregor_us	Respond to of 116555

That's a Very Reasonable Call on the GBP and NZD. But she doesn't mention the CAD, which I find interesting. In addition, she does not mention the excellent domestic balance sheet of New Zealand--nor of the UK. Yes, NZ and OZ are running current account deficits, but that is typical for this part of the cycle. The Aussie and NZeders are frugal when their currencies are in the toilet. As the commodity money rolls in, they begin to spend. I totally disagree that a normalized forex rate of NZD/USD is would be back at .5600. That was more true of the past. She may be using a post-free-float average that was around .5600 for several decades--until the late 1990's. More broadly she merely points out what everyone elese is saying: that the USD has fallen as much as it can against all these currencies--for now. That the USD adjustment never had much to do with the GBP--or NZD is not news. But everyone is now commentating like it is, in fact, news. This is why I keep saying the USD has to fall against Gold, or the Chinese currency. Neither of those want to cooperate either. So what does the Dollar collapse against next? It tried Oil, Coal, Copper, Houses, and all the major currencies. Where does the dollar go next to collapse? Accordingly, many think the USD is done collapsing. You know I think otherwise. PS: On the NZD, the government has indicated several times they will go to war against a NZD above .7000-.7200. However, it's important for people to understand the government export agencies actually subsidize the Hedging Contracts for their members (say..all the Dairy Farmers for example), so as long as the NZD gets below .7000 a couple of times a year, they can get those contracts off.