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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (94198)	5/13/2008 9:17:32 PM
From: Keith Feral	Read Replies (1) \| Respond to of 110194

Although I see no reason to sink money into private real estate (other than a house), if anyone had bought AAA CDO's on April 1, they would be filthy rich. The same would have been true had anyone sold AAA CDO's last summer. All these hard assets and financial assets will be incredibly volatile. Maybe we should all keep trading our horses and try not so much to worry what the hell the next guy is doing. It really makes me wonder how much money people are making by investing in all the trends that are supposed to end the world. Right now, it seems all the inflationists are the priveleged few. GL

To: John Vosilla who wrote (94198)	5/14/2008 2:12:00 PM
From: GST	Respond to of 110194

Lets take Japan as an example -- their concern is that the yen will soar into the stratosphere so they keep their interest rates so low as to encourage a massive carry trade. The carry trade dampens upward pressure on the yen and floods international markets with liquidity. Japan endeavors to keep our economy going to maintain export markets. But when your customer starts to go broke you end up cutting them off or risk massive losses -- and that is where we are going. In the meantime, Japan has been laying their plans to diversify away from dependence on the US for the past ten years or more. They are increasingly able to withstand a sharp upward movement of the Yen -- into say the 50 or 60 to the dollar range. Around the world the story is the same -- countries that depend on our markets are looking for ways to insulate themselves from our eroding financial condition. The ugly truth is that the dollar is grossly overvalued -- and it cannot stay this high for much longer.