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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: Douglas V. Fant who wrote (7994)	1/11/1998 8:49:00 AM
From: Alan Chan	Read Replies (1) \| Respond to of 13925

Hi Douglas I do agree with you that CREAF is still a great buy (or hold for some of us). For the short term, the US still looks like the place to be, more so in bonds than in equities. Most of the currencies are depreciating against the US$. I do think that US equities will hold for a short while more. In the long term, we would see two things developing. 1. Most countries will be considering holding the Euro and Yen as part of their reserves. Asia, after this round of humiliating US$-led downturn, is increasingly looking to non-US$ debts as well as using other than US$ for trade. We may end up with three trading blocks i.e. US$, Yen and Euro. Reduction in the demand for US$ will start to exert downward pressure on the currency (The US is still a net debtor to the tune of US$5.5 trillion). Already, the forecast for the US$/Yen exchange is pointing to 1US$=165 yen for the short term and 1US$=50 yen for the long term! A falling currency is not good news for either bonds or equities. 2. A return to the 1930s style depression may set in. Deflationary pressure is gaining momemtum. History does repeats itself! This will be bad for equities but will be good for bonds. This period of time is a "transitionary" period, not unlike the 1930s where we transitioned from a British pound-world to a US$-world (to put it simplistically). Best wishes. Alan