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

To: ballsschweaty who wrote (67815)	8/20/2007 9:57:57 AM
From: Real Man	Respond to of 116555

And who publishes the PPP data? -g- US has huge current account deficit. The only thing that worked for the dollar was the carry trade, as Ben raised and printed. That was over once he stopped raising while foreign countries were raising. The dollar fell to where it is today. Now, imagine what happens if he cuts, while other CBs continue raising (not a given). PPP of USD will go down, cause there are virtually no US-made goods, they're all Chinese. Well, maybe foreign CBs will just keep buying defaulting US mortgage securities, then the dollar will be OK.I kind of doubt it, though, given the recent turmoil. However, God help USD and US stocks if they sell. Imagine $100B per week in reverse coupon passes. They started selling again last week. Not too much, yet. Did you ever wonder why exactly Bernanke did not do a coupon pass since May? If he spooks foreigners, the game is truly over - 10-year rates will spike up, dollar will flush down the toilet, along with US stocks. Welcome to Fed-made currency crisis.