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To: Pete Schueler who wrote (9959)	4/15/1998 1:20:00 AM
From: Abner Hosmer	Respond to of 116895

Pete - Great scenario, it'd be great if you'd post more often. I think it's a good fit. A weaker dollar means higher interest rates and for one thing, we'd take it in the shorts big-time on the national debt. With govt sucking up more of the economy's output, interest rates would be driven up further. And with the massive worldwide money creation we've seen, a slowing economy would seem to equal stagflation. I see a few problems with this though. One is that commodity prices don't seem to be supporting this idea yet. Another is that the yen still seems to require outside support to keep its footing against the dollar. Third, I think we have to see interest rates in all of the major economies reverse course and start trending up (I don't think that the recent adjustment by the Germans counts). I think Japan would probably like to raise rates now, but they have to clean up the banking system before they can do that. Of course in Japan, rates have only one direction to go, so I think they'll give us the first signal. Thanks for posting your ideas - Tom