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

To: mishedlo who wrote (76595)	3/21/2008 3:49:29 AM
From: Real Man	Respond to of 116555

The question is, in which currency? US has a lion share of global current account deficit, consuming nearly all current account surpluses en.wikipedia.org What is negative for USD now? 1) Current account 2) International net investment position (note that it could deteriorate if foreign markets drop more than US market, which so far they have been doing) 3) Interest rates What is positive, for now? Deflationary flows from collapsing USD debt at foreign banks. Next question: Will risk on sovereign emerging market bonds widen drastically this time? I guess the spreads did widen, but the reason was Ben dropping rates, not these bonds collapsing. Sovereign reserve positions are huge this time, the risk to currency runs are minimal. Is there a risk of USD currency run? Yep. Some. Good read on credit crisis with some answers: bis.org Spreading to FX swaps now. Will US credit crisis derail the global economy enough to push it into recession to cut demand for commodities. It might, but not yet.