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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (118308)	6/5/2005 2:05:51 PM
From: carranza2	Respond to of 794349

I am not talking about the Chavez/China scenario Fallows paints, which is dramatic but is actually more of a Clancy-ish fantasy than anything else. I'm talking about a saturation point being reached by holders of UST bonds, a point at which foreigners apetites for more and more bonds is not economically justified and slows, then slowly reverses itself as some selling takes place. They will all notice what their neighbor is doing. Wholesale selling could result as the lessened apetite for bonds turns into a bit of selling, then into a lot of selling. These kinds of panics cannot be controlled, are short in duration, but are massively destructive. This is pretty much the dynamic of the Long Term Capital Management Asia crisis. It can't happen here? I'm not so sure. We have surely set up the dynamics for it to occur; it's how and when the trigger gets pulled that are the mysteries. Read this description of the Asia crisis and compare it to how many factors that were in place then are similar to those in place now as to the US...eerie similarity: ssga.com