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Strategies & Market Trends : CFZ E-Wiggle Workspace -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (6232)	4/15/2008 5:03:35 PM
From: skinowski	Read Replies (1) \| Respond to of 41599

selling their US bonds - that would push down the USD but push up interest rates. One inflationary and one disinflationary (and will make the USD more attractive again). I've heard this argument about this self-regulatory dynamic many times, and I'm sure it works. However, if it would always work, then our currency would be "safe" forever - it would just keep self-adjusting. Prudency dictates, imo, that we must consider a situation when this mechanism would no longer work - which could be scary. Moreover, knowing our "proactive" know-it-all populist politicians and the fed it wouldn't take them long to step in and start helping the "little guy" through more deficit spending.