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

To: Wyätt Gwyön who wrote (60207)	5/3/2006 1:56:42 PM
From: shades	Read Replies (1) \| Respond to of 110194

G7 Statement Doesn't Call For US$ Depreciation (Misunderstood? Lots of finance guys saying this lately eh?) HYDERABAD, India (Dow Jones)--Japanese Finance Minister Sadakazu Tanigaki said Wednesday moves in the currency markets have been excessive after a recent Group of Seven leading industrial nations meeting in part because market players may have misunderstood the G7's statement. "The G7 statement does not call for a depreciation of the dollar," Tanigaki told reporters on the sidelines of an annual meeting for the Asian Development Bank. "I'm worried that the market has misunderstood the G7." (MORE TO FOLLOW) Dow Jones Newswires May 03, 2006 13:46 ET (17:46 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.- - 01 46 PM EDT 05-03-06

To: Wyätt Gwyön who wrote (60207)	5/3/2006 2:03:20 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

I realize you asked me my view on the USD, and I answered about interest rates instead. I feel confident in my view about FCBs marking up rates, as their demand for all credit instruments (they hold a large and strange amount of agencies for example) xanga.com and US assets wanes (waning demand is different from a dump). I just think debt "asset" across the spectrum, are due for a large repricing, and lower. I'm not sure how that impacts the dollar. As long as foreigners hold USD in exchange for a fair and thus higher rate, the USD may get some support, especially if the US starts making less capital demands on the world. The alternative currencies also have to be weighed, and they have problems as well. In the short run the currencies that have been leaned on for leveraged carry trades, will benefit, as I expect these carries to blow up. Emerging economies, including developing ones like China are going to get hammered in my scenario.