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To: Archie Meeties who wrote (90217)	1/7/2008 12:46:36 PM
From: KyrosL	Read Replies (2) \| Respond to of 110194

It's not public debt as % of GDP that influences the exchange rate but rather balance of payment deficit as % of GDP. We have been running record amounts of that for many years -- 5-6% of GDP. Eurozone has as much public debt as the US and right now is actually running bigger budget deficits, but their trade balance has been consistently near zero or slightly positive -- for example, Germany usually runs huge trade surpluses. The reason for this difference is the high savings rate in Europe versus zero to negative savings rates in the US in the last decade.

To: Archie Meeties who wrote (90217)	1/7/2008 1:03:37 PM
From: GST	Respond to of 110194

Public debt is not the central issue for the dollar. The issue is how that debt and all of our other debts is financed. The US would be better off not to have trillions of dollars in public debt -- but what weighs so heavily on the dollar is that we ask foreigners to fund it for us - and that is not the case in Europe. When a soldier fires his weapon in Iraq, the bullet was paid for by borrowing a dollar from the Chinese government and one from the Saudis. The IOUs we have written are now overflowing the coffers of foreign governments. It is unsustainable.

To: Archie Meeties who wrote (90217)	1/7/2008 1:25:02 PM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 110194

Do not blow yourself up<< Also, at least one of those trades, the oil/dollar trade, has a decent shot of unwinding right about now.>> Iranian Revolutionary Guard boats harassed and provoked three US Navy ships in the strategic Strait of Hormuz, threatening to blow up the American vessels, US officials said Monday. They described it as a serious provocation. US forces were on the verge of firing on the Iranian boats in the early Sunday incident, when the boats turned and moved away, a Defense Department official said. "It is the most serious provocation of this sort that we've seen yet," said the official, who spoke on condition of anonymity because he was not authorized to speak on the record. White House spokesman Tony Fratto said: "We urge the Iranians to refrain from such provocative actions that could lead to a dangerous incident in the future." The incident occurred at about 5 a.m. local time Sunday as a US Navy cruiser, destroyer and frigate were on their way into the Gulf and passing through the strait - a major oil shipping route. Five small boats began charging the US ships, dropping boxes in the water in front of the ships and forcing the US ships to take evasive maneuvers, the Pentagon official said. There were no injuries but the official said there could have been, because the Iranian boats turned away "literally at the very moment that US forces were preparing to open fire" in self defense. The official said he did not have the precise transcript of communications that the two forces exchanged, but said the Iranians radioed something like "we're coming at you and you'll explode in a couple minutes." Iran's Foreign Ministry said Monday that the confrontation was "something normal" and was resolved. It suggested the Iranian boats had not recognized the US vessels. Iranian Foreign Ministry spokesman Mohammed Ali Hosseini played down the incident, suggesting it was an issue of mis-identification. He did not comment on the US claims of the Iranian boats' actions. "That is something normal that takes place every now and then for each party, and it (the problem) is settled after identification of the two parties," he told the state news agency IRNA. The incident was "similar to past ones" that were resolved "once the two sides recognized each other," he said. In another incident off its coast, Iranian Revolutionary Guard sailors last March captured 15 British sailors and held them for nearly two weeks. The 15 sailors from HMS Cornwall, including one woman, were captured on March 23. Iran claims the crew, operating in a small patrol craft, had intruded into Iranian waters - a claim denied by Britain. Print Subscribe E-mail Toolbar

To: Archie Meeties who wrote (90217)	1/7/2008 3:54:51 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 110194

Let's also not forget that Europe and parts of Asia (china specifically) are seeing tremendous real estate price surges.. The one thing that sets us apart from Europe has been our high employment rate. So, with that in mind, the high unemployment in Europe should be considered a factor when it comes to assessing their real estate bubble (and borrowers ability to maintain their mortgages). Hawk