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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (49647)	1/12/2006 8:06:40 PM
From: ild	Respond to of 110194

<<<If you were in one of the countries that had USD-based assets (currency, debt,etc) and you believed the US was headed for very hard times economically and you wanted to limit your exposure to those hard times, are you saying you couldn't find a way to do it? We have to start looking at things from their perspectives not our own.>>> IMO smaller countries will be able to convert their USD holding into something else, but not China and Japan. <<<For example, suppose if you had debt you owed to the US, you could accelerate the payment of it and use USD to pay it.>>> If I had debt owed to the US I would NOT try to accelerate the payment of it (unless the interest I pay is very high). USD is going down so tomorrow it will cost me less to pay down that debt. In fact it is advantages to borrow in USDs and pay later with depreciated money. This is EXACTLY what the US is doing! <<<One of the very first things, however, would be to slow down the inflow of USD denominated assets.>>> Very true, but hard to achieve. <<<What I would not do is sit around believing there is nothing I could do.....and I don't think you would either.>>> You and I can just buy gold/oil etc. Japan and China have soo much of USDs that they can't buy anything so substantially reduce their USD holdings. Plus other countries are (will be) pushing more USD onto them.

To: TimbaBear who wrote (49647)	1/12/2006 8:08:39 PM
From: pogohere	Respond to of 110194

Here's an idea! How 'bout some oil producer starting up an oil trading bourse with contracts denominated in euros!! Can you say: "See you in Iran in March '06?" Iraq tried selling oil in euros. Timing is so difficult in these matters.

To: TimbaBear who wrote (49647)	1/14/2006 1:25:40 AM
From: GST	Read Replies (1) \| Respond to of 110194

Notice that the deflationists have NEVER dealt with the realities of Japan -- a nation of savers running a huge current account surplus. They ALWAYS assume that the dynamic played out in Japan will play out in the US -- although the US is a debtor nation running a huge current account deficit. The deflationists do not live in the real world. They live in a make believe world where little problems like the current account deficit don't matter. I suppose it does not matter how lame that approach is -- they can think as they like. I simply need to learn to have a good belly laugh whenever our circumstances are compared to that of Japan and then forget about the silliness of it. I enjoy your posts -- all the best.