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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: tekgk who wrote (8090)	11/16/1997 12:28:00 PM
From: Rational	Read Replies (2) \| Respond to of 18056

I envision a scenario in which the dollar will gradually decline as the Japanese and others sell their US Treasuries. Friday's report says that the Japanese will use this money to buy their bank preferred stock to lift up their banking sector. What will other governments do, given that they are selling their gold reserves? The good old virtue of gold reserves is fading rapidly and will continue to be the case. This means that countries will hold each others Treasury notes and so there will be a massive redistribution of portfolios of central banks. US will be the loser because at this time most Central Banks hold more US Treasuries than other govt Treasuries; dollar will decline in value, and the stock market will shrink as the Fed raises interest rate to prop up the dollar (like Hong Kong did). I do not see a boom in other stock markets; but no further down-turn. Sankar