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: ild who wrote (25853)	2/4/2005 1:01:54 PM
From: ild	Respond to of 110194

Date: Fri Feb 04 2005 12:20 trotsky (strat@defending the dollar) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved there is absolutely no guarantee that the currency CAN be defended by higher rates. it is the conventional expectation, but with the elephant in the room ( in the form of a nearly $5 trillion foreign held dollar claims net long position that grows by $2 billion EVERY SINGLE DAY ) not going away anytime soon, the opposite could just as well happen. history is replete with currencies that collapsed concurrently with soaring interest rates...most recently the Argentine peso ,and in the late 90's, just about every Asian currency outside the non-convertible Yuan one can think of, to name a few examples. once one has banana-republic type economic imbalances besetting an economy, keeping faith in the currency alive is an increasingly difficult task. the only saving grace as far as i can tell is that the competition isn't much better.