Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (3436)	5/9/1998 10:16:00 AM
From: Zeev Hed	Read Replies (3) \| Respond to of 9980

Stitch, I cannot see a rational scenario for the Fed's to raise interest rates here in the US over the next six months. If they did, there will be a torrent of yen flooding pour markets, a collapse of the yen itself below 150 yen/dollar, and a deepening of the Asian problems, since congress is going to fight like jell to close our doors to imports from there. As it is we are going to run a horrendous trade deficit (to help the rim from going under), with a much weaker yen, it would essentially put the onus of preventing worldwide deflation on the US shoulders alone. We need to have both Japan and Europe shoulder the burden of providing a "soft landing" (in this case avoid outright depression) to SEA by providing "demand of last resort". If Japan does not shoulder its part by opening its markets, then the whole world will be set back for a good five years if not more. The danger that Greenspan is fighting here (and allowing our bubble to grow) is a worldwide deflationary spiral. He is in a very tight box. Our interest rates are already historically high and the FED are already in a restrictive stance (I would say almost 2% excess real interest rates), a more restrictive stance will be calamitous. Zeev