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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (22440)	2/25/2005 8:54:22 AM
From: sea_urchin	Respond to of 81102

Phil > "U.S. Data Shows Economy on Solid Ground" Especially when one sees what criterion was being used >>rising business demand for capital goods showed the economy still on solid ground<< Sure adds credence to the US dictum - The more one consumes, the richer one is. Meanwhile, away from the world of make-believe, others have a slightly different view iht.com >>When a seemingly innocuous remark from the central bank of South Korea makes the dollar tank, as happened on Tuesday, all is not well with the United States' position in the world economy. The dollar has been on a downward trajectory for three years, thanks in part to the Bush administration's decision to try to use a cheap dollar to shrink the nation's enormous trade deficit. To be truly effective, however, a weak dollar must be combined with a lower federal budget deficit - or even a budget surplus, something the administration clearly hasn't delivered. So predictably, the weak-dollar ploy hasn't worked. The United States' trade deficit has mushroomed to record levels, as has the United States' need to borrow from abroad - some $2 billion a day - just to balance its books. Tuesday's sell-off of dollars did not precipitate a meltdown. But it sure gave a taste of one. The dollar suffered its worst single-day decline in two months against the yen and the euro. Stock markets in New York, London, Paris and Frankfurt, Germany, dropped, and gold and oil prices, which tend to go up when the dollar goes down, spiked. Luckily, the markets calmed down Wednesday, as Asian central banks said they did not intend to shun dollars. While such damage control is welcome, it's no fix. Tuesday's market episode has its roots in American structural imbalances that will be corrected only by new policies, not more of the same tax-cut-and-weak-dollar deficit-bloating ploys. If George W. Bush were half the capitalist he claims he is, he would listen to what the markets are telling him.<< But he cares as much about the markets as he cares about what anyone else thinks or says -- Sweet Fanny Adams. All he knows is he was put on earth to bring American freedom and democracy to everyone -- at whatever cost.

To: philv who wrote (22440)	2/27/2005 4:53:39 PM
From: sea_urchin	Read Replies (2) \| Respond to of 81102

Phil > ``It's in nobody's interest for the dollar to fall,' said Jen. ``The Europeans are clear they don't want to see the dollar fall further, so are the Japanese, and now the other Asian countries are saying it.' A view which Henry Kaufman also holds. nytimes.com >>Q. A Chinese official was quoted as saying that his government was not happy with the dollar's weakness. Do you think the Chinese or Japanese could shift their holdings elsewhere? A. I doubt that very much. Both China and Japan are big exporters to the United States. I believe that the Chinese and Japanese, down deep, realize that if they shifted from the American dollar to the euro, it would endanger their export drive to the United States. Q. So what is your prognosis for the dollar? A. I think there is going to be reasonable stability with occasionally a little bit of a give in the value of the dollar. Q. Do you think a decline in the value of the dollar sharply stimulates our exports? A. I do not. It takes much longer this time around for the decline in the dollar to have a significant impact on our trade. It involves a number of countries such as India and China that provide goods and services to us at a very low labor cost. To turn that around, that will require a really significant decline in the value of the dollar. That's not about to happen.<<