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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Riskmgmt who wrote (7100)	6/9/2006 1:46:49 PM
From: Seeker of Truth	Read Replies (2) \| Respond to of 217786

Hello Mr. Smith, "everyone and his brother predicting the demise of the American economy and the US dollar". Your comment underscores my own perpetual dilemma.I do not know what everyone and his brother are doing. I really wish I did. I see for example that COS-UN.to has only 36% of the units owned by Americans. I would have expected a much higher percentage if everyone and his brother were etc. The Americans have more per capita cash and more interest in the stock market than Canadians. But they have not piled into this obvious grip on the future as much as I would have anticipated. This is a flimsy guess. I really don't get around. Most people I talk to are interested in enzymes, catalysts, information systems, object oriented programming etc. I'm away from the main stream. If you have more evidence which you could present showing that "everyone and" etc. please share it with us. This is not a jeer or some veiled insult; I really would like to know.

To: Riskmgmt who wrote (7100)	6/9/2006 3:26:13 PM
From: energyplay	Read Replies (2) \| Respond to of 217786

These are good questions- you should post more. "With everyone and his brother predicting the demise of the American economy and the Dollar, maybe the smart money is betting the opposite." The smart money has been betting against the US Dollar for about 2-4 years now. The bet has paid off - see USD vs. Gold, USD vs, oil, USD vs. Aussie Dollar, USD vs. UK Pound, USD vs. Copper - incredible ! and others. To make these bets, many hedge funds and individuals shorted US tresuries of various durations. When these trades are closed, they will be the treasuries to cover the short. Now some of these bets are being unwound - see USD vs. Gold. Why ? Here's the sort of reasoning that is involved... When many of these bets were made, US interest rates were much lower 3.5% - well under most every estimate of inflation or price gain for real commodities. When the bet was made, you might have expected copper to gain 20% that year, with a range for 10% to 35%. Today, the rate is 5%, and likely to go to 5.5%. We might expect copper to gain 7% for the year, with a range of -10% to + 15%. Notice we now have some loss possibilites. Also notice the averge gain of 7% is only 2% above the 55 cost. Not much reward, and you have risk of loss. Since the risk / reward is not good enough, the trade will be closed out, even though the USD may still go down vs. copper. Closing out the trade often involves buying US treasury paper. Next you have the question of which currency to hold. The USD is good short term, because some many commodities (oil, gold, copper) are denominated in USD, most derivatives are denominated in USD ** The safety of US treausry paper - the "flight to quality" is also a reason US treasuries are going up in price. That can be a very powerful driver when fear increases. ** Now I will argue that the predicted death of the US dollar is exaggerated. I expect the USD to loose value long term (maybe 20-30% from today, June 9, 2006), but not fall apart - meaning not down more than 50%. I think this is different from TJ's view, an likely different from SoT's view and Taikun's view. My time frame is maybe 2-3 years maximum for paper investments, and other people may have long time lines. My time frame for the physical gold I have is 3 years to maybe 7 years.

To: Riskmgmt who wrote (7100)	6/10/2006 2:29:02 AM
From: TobagoJack	Read Replies (5) \| Respond to of 217786

Hello Ray, exceedingly few folks are predicting the demise of the American economy, and with it, the USD. Given the bounce of the USD in recent days, the vigor can really only be taken as the crowds, meaning the many, rushing out of niche pools of danger, to escape into the morass of the swamp. Gold remains the absolutely safest exit from the as yet not played out but soon to be bigger turmoil and higher level of fear. The entry cost of gold, even at current price level, may be a sudden 20% hair cut, but, we can feel fairly sure, that the hair will grow back. As to <<If the US gets phucked the rest of the world is phucked in spades!>> ... bingo, for how else would the market phuck the greatest number of people in the nastiest of way? And so, I figure worldmarket.blogspot.com we must add Dark Matter, for the fun just got started, and the progression ought to be predictable, or if not, at least guarded against. I remind myself, in nature, ignoring the unusual behavior of creatures big and small immediately before pre-tremors may not be well advised, and writing off the pre-tremors themselves may lead to unhappy events. Chugs, J

To: Riskmgmt who wrote (7100)	6/10/2006 4:26:25 AM
From: critical_mass	Respond to of 217786

I wrote this roughly a month ago. Message 22447169 Although there was a spike in the short interest in the 2 year, the net positions are basically the same, i.e. the Commercials, often dubbed the "smart money" are long the 5, 10 and 30 year. Over the medium and long term, I don't expect a stronger dollar.

To: Riskmgmt who wrote (7100)	6/10/2006 7:47:02 AM
From: TobagoJack	Read Replies (1) \| Respond to of 217786

Hello Ray, according to the latest Richebacher Report, "During the five years from 2000–05, U.S. nominal GDP grew by $2.6 trillion and real GDP by $1.3 trillion. Over the same period, total indebtedness increased $12.3 trillion. The huge difference between GDP and debt growth indicates that the debts went overwhelmingly into asset purchases, fueling asset price inflation. This is where the Great Global Inflation has been concentrated." ... and so we might do well by concluding that, (i) what ever had gone on will eventualy stop (ii) what went up in 5 years elapsed time might come down within a duration of 30 months (iii) bigger the debt-enhanced boom, nastier the debt-deflation kaboom (iv) suppose 6 trillion of debt-deluge gets withdrawn, and their counter-party asset deflation might go DOWN by the same amount, by and by, and if so, equity gets vaporized Remember, the volume of deluge, in the form of true capital, as opposed to that printing press hot stuff, is determined in Tokyo mostly, and Beijing, only by derivation, and, in all cases, control most assuredly does not reside in Washington. Do the phrase, "out of control" ring alarm bells. (v) but,no, the debtors will not benefit from default, because the asset is not worth what he paid for, and the cash flow will not support the remaining principal balance, especially if the debtors' pensions are in fact invested in the debt, round-about way (vi) so, USD rising is easily explained, as exodus gate is the USD, but then the gate will collapse, at some point, when 8,000 hedge funds concludes that the dollar is doomed, or, alternatively, the economy is finished; outcome to be decided by Helicopter Ben BoomBurpBurnKaput. Folks do not expect the collapse of the US economy, real or financial, and that in fact is the stark choice coming up, precisely. What else can I do besides yelling, "fire in the theatre" ? Chugs, J