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To: lorne who wrote (3442)	11/23/1997 11:13:00 AM
From: Ron Wilkinson	Read Replies (1) \| Respond to of 116822

lorne, raising interest rates takes some discretionary income out of the economy and makes it more difficult for growing companies to build their expansion. It does help a currency hold its value against others. I believe the US is close if not Canada's largest trading partner and it is possible that a decline against the US dollar could really help make up some Asian export loses. IMO. Regards, Ron.

To: lorne who wrote (3442)	11/23/1997 11:42:00 AM
From: Ron Everest	Respond to of 116822

I believe that the Canadian $ weakness is primarily due to the differential in C Interest Rates versus US Interest Rates. At one Year the spread is approximately 1.7% lower in Canada. Thiessen stated last week that he would be raising C Interest Rates approx 200 bp's which would IMO support the differential in interest rates, thus supporting the inflow of $ or the keeping of offshore and internal $ in the huge pool of funds needed to support accumulated deficits. Thiessen stated or implied that his moves would be to ward off inflation, (dampen its emergence), with the 200 bp move over time (how much time?). Canada's inflation rate y over y is approx 1.50%, thus, inflation is currently not a problem. Unemployment is over 9% nationally. Some industries are tanking, mining, forestry. My conclusion is that the US rates are the ones that may be subject to some short term increases. IMO this would be due to the unsatiable need to find funds to support the US deficits. Canada's Thiessen is obviously looking at the US situation and does not want the spectre of having to make up the 170 bp differential at one year and ALSO the potential for making up whatever additional rate rises occur in the US. Canadian Interest rates have traditionally always followed US rates. The current scenario is a departure from the traditional. The C$ has been tanking in relation to the US $ lately, but only in a minor way. It seems to fight its way back in short order to the 70-71 cent range. My prediction is that if and when the C$ tanks into the 68-69 cent range the Bank of Canada will begin raising rates. A couple of months back Canada had a 1/2% rise in prime, however, this reflected in certain wholesale rates but did not fully reflect on either side (deposits and loans) at the retail side. If the rates rise in the US say 1/2% then the markets would likely take a hit and go into stall for a time. Canadian markets will follow the US. The postulation I am making is that if the US takes a 50 bp rise in rates then Canada will have to take a greater rise to hold funds in Canada's. Best regards, Ron E

To: lorne who wrote (3442)	11/23/1997 7:31:00 PM
From: lorne	Read Replies (1) \| Respond to of 116822

Found this story on" BT on Line" Nov.22/97 Has anyone heard of this before or ever heard of this person. Wonder if he holds gold, maybe this is just fiction. Once upon a time... CONSPIRACY theorists will love the latest issue of newsletter World Money Analyst, a product from Welt Research. According to the newsletter, the most powerful man in the world is not Bill Clinton or Alan Greenspan but a "shadowy figure behind the scenes in China". The man in question is Wang Jun, chairman of China's largest corporation, the China International Trust and Investment Corp, and son of China's late vice-president Wang Zhen. The point, according to World Money Analyst, is that Mr Wang Jr has orchestrated the most rapid buyout of US Treasuries in history and China is soon set to be the third largest holders of US debt in the world. The plot thickens with the newsletter suggesting that China/Mr Wang could pull the plug on the US (and the rest of the world) by dumping US Treasuries in a bid to gain world supremacy. "The subsequent money crisis would send the (US) economy into the toilet. And the stockmarket along with it." Bad news for anyone unprepared, portends the newsletter . . . unless of course you immediately sign up for a subscription for a low low price of US$478, in which case salvation is just around the corner!