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: Wyätt Gwyön who wrote (54294)	2/20/2006 11:22:57 AM
From: el_gaviero	Read Replies (1) \| Respond to of 110194

Another good post --- call it Occam’s razor applied to Asian CBs. They do what they do because they want the result they get: i.e., low domestic currency, high dollar, lots of exports. You say about Japan’s strategy of exporting to the USA that the Japanese haven’t “ended their addiction .... after 40 years. “ Why is that? Are there political reasons why the Japanese don’t change their strategy of mercantilism? Would exporters in Japan lose power if domestic consumption went up while exports went down (or came to represent a smaller proportion of GDP)? In other words, has an economic strategy somehow gotten frozen into the structure of Japanese institutions, so that a change of strategy would entail changes in the area of politics ---- with new relationships of dominance and subservience, etc etc?

To: Wyätt Gwyön who wrote (54294)	2/20/2006 6:29:06 PM
From: TimbaBear	Read Replies (1) \| Respond to of 110194

Timba The USD is as strong as it is, in no small measure due to the US consumer buying the bulk of his stuff overseas. Darffot honestly i thought that was why USD is supposed to be weak (since we have a huge C/A deficit). this is the moralizing line taken by goldbugs. USD weakness, like the weakness of any fiat currency, comes from the perception of ability to honor the fiat. Thus it isn't the current account deficit that matters as much as the current budget deficit combined with the accumulated indebtedness of the US Government. Timba brings into question (perhaps) the wisdom of FCBs' continued holding of the sizable stores of USD and, perhaps, switching out those holdings for a fiat that isn't quite as extended credit-wise or into commodities which don't need to rely on fiat. Darffot i assume by "wisdom" here you mean the "investment wisdom" of FCBs. You assume incorrectly and then go on to fight a strawman of your own creation. I meant exactly what I said. If I had meant to include the word "investment" I would have done so. Timba

To: Wyätt Gwyön who wrote (54294)	2/20/2006 7:52:32 PM
From: NOW	Respond to of 110194

"it is like believing Hamas and the Israelis can form a cabal." Welll interstingly, recent evidence has emerged that isreali intelligence indeed funded hamas....now taht doesnt mean cabla, nor diminsh your point...but stranger bedfellows have certainly been seen

To: Wyätt Gwyön who wrote (54294)	2/20/2006 7:54:45 PM
From: NOW	Respond to of 110194

"in sum, Asian CBs don't "invest" in USD; they opportunistically manipulate their currencies to support local export growth. can this go on forever? probably not. but Japan hasn't ended their addiction to the US after 40 years, and China is just getting started. sure, the US is run by nuts and we are profligate and have no right to our "easy ride", as the moralizing goldbugs would have it. but who said life is fair? one of these days, the game will change, but that could be many years from now, and one has to wonder if "many years" is equal to the time horizon of "investors" in gold stocks trading at 50x PEs." This assumes that gold stock investors are in it for a weak dollar story. many are. some of us are not