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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (10082)	3/6/2006 7:52:05 PM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 12410

Take a good look at the Utilities Index, kinda scary... charts3.barchart.com GZ

To: Investor2 who wrote (10082)	3/7/2006 9:36:02 AM
From: Rarebird	Read Replies (1) \| Respond to of 12410

Consumer spending and prices are climbing in Japan. Japan will raise its interest rates. The "Carry-Trade" is being carried away here. The US has been a beneficiary of the global "carry trade". This trade is, in principle, simplicity itself. One borrows externally at Japan's near zero rates of interest or in Europe with its recent 2.00 percent official rate. One then "imports" the borrowed money into the US, converting it to USD and lending those Dollars at local much higher commercial or mortgage rates of interest. One then walks away with the difference as clear net profit. American banks have certainly been doing just that. They are now up to their necks in foreign loans which they re-lent to Americans. At some point, America's foreign lenders will take a hard look at what we owe them and start looking at other places in the world as destinations for their loans. When that happens, they will stop "carrying" their money to America and the foreign inflow of money will ebb. Then, they will start calling for repayment on some of our loans. And the money will flow the other way, out of America. When that happens, America's financial system will come under credit stress. It will have to find the money inside America and then send it offshore to repay the debts. The only way to prevent or even delay all this is for America itself to raise its own official rates of interest to keep present foreign loans inside America and being rolled over. If this isn't done and the money flows out, the American Dollar will get hammered.