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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (50571)	5/4/2006 5:16:43 PM
From: regli	Respond to of 116555

"...how about private foreign investors? Are they already out of the picture?" The U.S. presently needs approx. 3 billion dollars a day of net inflows. If FCBs cool to the dollar because they cannot or don't want to take the losses then private investment will not make up for it. Note there is little enthusiasm for U.S. investments by private investors as the even the DOW has done quite badly in real terms since 2000. "However, if Fed Bennie stops hiking (or even starts cutting) rates, don't you think oil will go through the roof?" Yes, I believe oil will rise in such a circumstance. I actually believe that oil will stay high or go higher unless we have a significant recession and I don't see that happening before November. IMO the Fed is trapped and there is no easy way out. I believe that it will chose the politically expedient way into a least immediate pain solution. The long term pain is a wholly different issue.