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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (80075)	6/25/2007 12:06:56 PM
From: Mike Johnston	Read Replies (2) \| Respond to of 306849

However if the fed tries to protect the dollar at these levels and needs to raise interest rates and (or) Chinese redeploy capital away from US T bonds in a booming economy that can't be good for the DOW Correct, however the Fed does not have the option to protect the dollar. In fact just the opposite, the only way to avoid total economic collapse right now, is further devaluation of the dollar. IMO the Fed will only pretend to protect the dollar to lull the public into complacency which will allow them to do just the opposite: inflate money supply. If the public will not take steps to protect itself from getting ripped off, the Fed will be successful. If they try to protect themselves, the Fed will fail, that is exactly why there are desperate attempts being made to brainwash the American public into thinking that inflation is low, so that they will not take any action to protect themselves from the ravages of inflation.

To: John Vosilla who wrote (80075)	6/25/2007 10:28:22 PM
From: gregor_us	Read Replies (2) \| Respond to of 306849

If One Uses the Economist Magazine's Commodity Index, the full basket of both hard and soft commodities in USD terms is up about 100% since the start of this decade. (A loss of USD Purchasing power of 50.00%) Then, if we turn to the NYBOT Dollar Index, the most popular of the Dollar Indexes, the DXY, at .8200 today, that is down about 22.00% from its level of 105.00, at the start of this decade. (Yes, its down alot more from the peaks in 2001/2/3) The way I see the INDU in global terms is as follows: I think the DXY does not reflect enough of the eroded purchasing power of the USD, since 01 JAN 2000. However, I think the Economist Magazine's index while certainly accurate, may stretch the picture of the USD's weakened PP (purchasing power) a little too far. If we discount the INDU by the DXY from 01 JAN 2000, we take off 22.00%, but using the Commod index, we'd take off 50%. You go back to 1999, and take off a tad more. Which I do find compelling. (On the other hand, after stocks fell hard in 2000, and were traveling towards the lows of 2002, the USD was still rising. So, that's interesting too.) I have been of the view in the last 12 months, and especially the last 6 months, that US stocks have become yet another in a series of hedges against USD weakness. In a conscious way. In other words, I think participants are aware they are keeping USD exposure low, and hiding in US stocks, just in the same way participants have done the same with foreign stocks, and resource stocks, the last few years. There are probably a few models out there that show when certain crossover points are reached, and, book value and earnings of say INDU components simply cannot keep up with the destruction of the USD, and that the earnings from them in real terms starts to deteriorate too quickly. I intuit we are approaching such a crossover. I would probably peg the INDU's current levels at 8682.00 in 2000 USD purchasing power terms. That's a discount of 35.00% from today's close. Gregor PS: This secular dollar decline has some interesting implications for house prices, especially if both current trends continue for the next few years.

To: John Vosilla who wrote (80075)	6/25/2007 10:42:43 PM
From: bkcraun	Respond to of 306849

Uh oh.............Iranian Revolutionary Guard forces have been spotted by British troops crossing the border into southern Iraq, The Sun tabloid reported on Tuesday. Britain's defence ministry would not confirm or deny the report, with a spokesman declining to comment on "intelligence matters". An unidentified intelligence source told the tabloid: "It is an extremely alarming development and raises the stakes considerably. In effect, it means we are in a full on war with Iran -- but nobody has officially declared it." "We have hard proof that the Iranian Revolutionary Guard Corps have crossed the border to attack us. It is very hard for us to strike back. All we can do is try to defend ourselves. We are badly on the back foot." The Sun said that radar sightings of Iranian helicopters crossing into the Iraqi desert were confirmed to it by very senior military sources. In response to the report, a British defence ministry spokesman said: "There is evidence that explosive devices used against our troops in southern Iraq originated in Iran."