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

To: Giordano Bruno who wrote (2513)	11/22/2007 7:32:27 AM
From: Real Man	Read Replies (2) \| Respond to of 71479

Big moves in agency spreads over treasuries. Now, a 25 bp. cut is a certainty in December. However, how will the foreigners react to it? They hold both a lot of FNM, FRE debt AND they are losing on the dollar. Cuts at this point could prove to be counter-effective, as the market sells the risky bonds, driving interest rates higher exactly where the lower rates are needed most. This is a big, big mess - and, I believe, the dollar is still headed for a fall, as the Fed will rush in with more cuts. This looks like a situation in which the Fed could become irrelevant.