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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (1091)	9/21/2007 8:46:54 AM
From: stan_hughes	Respond to of 71452

I don't expect the ROW to be raising rates -- on the contrary, their own economies are getting skewered by the decline in the dollar due to relative pricing on the export side. So as the USD slide continues (which it will for debt and confidence reasons now, and not so much for rate reasons alone) and all other currencies rise into nosebleed country, watch instead for interest rate cutting by some of these other nations, which will finally set off the long-predicted worldwide inflationary spiral -- in which case even the most rabid gold bull will probably have underestimated where the POG will go. No doubt that this rather unpleasant scenario was the topic of some discussion at Jackson Hole, as the only way to avoid it would be to make some sort of pact where foreign CBs would not follow US rate cuts with their own. However, I think the CBs have about as much chance of keeping everybody in line on that score as OPEC usually does with production quota cheating. They might take the first few hits, but once they conclude that they are getting creamed while only the US benefits, they will break ranks. And and once a currency devaluation competition gets going in a race to the bottom, all hell is going to break loose on this planet .

To: Real Man who wrote (1091)	9/21/2007 9:08:45 AM
From: stan_hughes	Read Replies (4) \| Respond to of 71452

I don't expect the ROW to be raising rates -- on the contrary, their own economies are getting skewered by the decline in the dollar due to relative pricing on the export side. So as the USD slide continues (which it will for debt and confidence reasons now, and not so much for rate reasons alone) and all other currencies rise into nosebleed country, watch instead for interest rate cutting by some of these other nations, which will finally set off the long-predicted worldwide inflationary spiral -- in which case even the most rabid gold bull will probably have underestimated where the POG will go. No doubt that this rather unpleasant scenario was the topic of some discussion at Jackson Hole, as the only way to avoid it would be to make some sort of pact where foreign CBs would not follow US rate cuts with their own. However, I think the CBs have about as much chance of keeping everybody in line on that score as OPEC usually does with production quota cheating. They might take the first few hits, but once they conclude that they are getting creamed while only the US benefits, they will break ranks. And once a currency devaluation competition gets going in a race to the bottom, all hell is going to break loose on this planet .