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

To: mishedlo who wrote (22740)	2/3/2005 12:38:21 AM
From: mishedlo	Respond to of 116555

Heinz on gold, the US$, the FED etc. Date: Wed Feb 02 2005 15:09 trotsky (@dollar shorts) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved actually, the commitments of traders reports show extant speculative non-dollar currency net long positions are the lowest in many a moon ( iow, there aren't really all that many dollar shorts out there ) . over the past 3 years, significant down legs in the dollar's bear market have all started from similar positioning. the rate differential has moved a little further in favor of the dollar, but NOTHING ELSE HAS. the perennially strong Yen shows that rate differentials aren't everything in relative currency valuations. what's more important is whatever the market has decided to focus upon. and the focus seems to be on the fact that US external debt is increasing at a rate of $2 billion per day, which means that the eoutstanding dollar net long position in the hand of foreign investors keeps growing at a breakneck pace. it is this nigh endless fount of dollar supply that keeps it under pressure. Date: Wed Feb 02 2005 15:02 trotsky (turns of phrase) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved Pisani just opined that had the FOMC changed the language of its statement, then "everybody would have been worried that the FED was seeing something the rest of us aren't seeing". in short, they'd have been worried that the bureaucrats are hallucinating. it is erroneous to believe that they have any better 'insights' into the economy or the markets than anyone else. on the contrary, since they are an inherently socialist, anti-market central economic planning agency , it's a good bet that their decisions have exactly the same long term effects that have been observed in central economic planning throughout history - iow, they are certain to do more harm than good and boom-bust cycles should be expected to continue. Date: Wed Feb 02 2005 14:05 trotsky (Flash) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "After all, when companies that have to maximize profits compete with companies that seek to maximize national influence and power, the latter will engage in projects that the former simply cannot." it should be obvious that engaging in non-profitable projects by state-owned companies WEAKENS those companies and the states holding their shares. ultimately that is what brought down the Soviet Union. when the state is involved in business, resources are wasted and money is lost. therefore, the implicit suggestion here: "Whether America can continue to rely on its private sector to provide us with comparable clout is no longer certain." is complete hogwash. it is ONLY by keeping the private enterprise system intact that one retains 'clout'. the alternative ( i.e., the implicit suggestion ) of nationalizing the oil companies is called communism and has never worked anywhere. it is the road to certain ruin. not that i'm surprised that a statist like you is all aglow at the possibilities ( one wonders though what your beef with socialism is, since you so eagerly support it as long as its wearing its fascist hat ) . Date: Wed Feb 02 2005 13:52 trotsky (Earl Grey) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved " I really don't understand why the financial stocks are holding up so well with the flattening yield curve. " good point, but maybe there are expectations it will widen again? also, why should one be surprised. after the triumph of manic financial herding over logic in evidence at Nasdaq 5,000, one shouldn't be surprised by anything. the Nikkei has always been held up as an example of an irrational bubble, but can't even remotely hold a candle to the US tech bubble of the 90's. in terms of p/e ratios the NAZ bubble was over three times worse, if one neglects to count the loss makers that is. in essence we've been lurching from one bubble to the next under Greenspan's John Law-like monetary expansion...this has led to rationality in stock market pricing being in a state of suspended animation for vast stretches of time.