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 : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (5031)	3/26/2006 2:05:40 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 217714

<//If, to avoid inflation, interest rates here are raised, the drop in NZD will accelerate.// higher interest rates tend to support currencies.> True. I was thinking of a case where the economy is imploding with loads of debt around, and interest rates go up. I think that might cause a cascading collapse as creditors lose their shirts and bankruptcy courts are jammed and markets can't clear the assets to creditors fast enought to keep residual economic activity going. I'm pointing out that we will be getting inflation in NZ, and lots of it. The usual response to inflation is to raise interest rates. You picked the very tippy-top QCOM share price which was obviously, at the time, way too high. Right now, I think it's over-priced [though it could be that over the next 5 years, we will find that in fact it is not over-priced right now]. Yes, so far in the 21st century, NZD has been a great winner compared with QCOM which has lost a lot of value. And compared with most investments NZD has been excellent. You could have picked the post crash QCOM low. Or, the Jan 1999 price. Or the average over 10 years, or 5. Why pick the peak? The NZD pays 7% now. Meanwhile, USD interest rates are climbing, as are Japanese, eroding the advantage of the NZD. I expect that as the crunch in NZ continues, interest rates here will drop as people stop wanting to borrow to buy overpriced houses. NZD at US40c will not in the slightest surprise me. Mqurice