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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (117)	5/15/1998 9:28:00 AM
From: X Y Zebra	Read Replies (1) \| Respond to of 3536

Henry, As usual reading your posts are clear and to the point. I would also add that it is my understanding that the Chinese could very well replace the Japanese as buyers of US Dollars. In addition, given the fact that everyone in the world is gearing and pushing towards a more efficient systems of resource utilization i.e. free markets, the need for gold as a 'store of value' is greatly reduced. This is due in my opinion to the fact that nation's 'store of value' become their own capacity to produce [more or less] efficiently. The amount (or 'mountain'), of debt becomes important in terms as a percentage of their own GDP, not necessarily as a specific 'total' amount. In simpler terms, I believe that nations will be seen more as corporations, that if they manage their debt responsibly, the free market will reward them by not devaluing their currencies. Or if I personally are able to increase my income the local bank will not mind if I get a large loan to buy my 'dream home', either on the lake or top of the mountain..... Of course if I do that, the possibility for me to further obtain loans for productive purposes is greatly reduced. In the past, many nations, behaved irresponsibly. Nations did not buy fancy homes..... but the generals/dictators/tyrants/villains that were their leaders, did buy those homes and more, not to mention that their cronies did the same thing, wasting away valuable resources that could have been utilized more efficiently to make their respective nations not only more productive, but their currencies would not have suffered the massive devaluations we have witness lately. (or riots). For some reason these countries [and others], come to mind: Indonesia, Mexico, Thailand, Brazil, the Pharenghies....... Further, the former ability of nations to simply 'turn on' the printing money machine will be limited as the rest of the world will be watching and such information will be readily available. The free market will simply serve justice swiftly by devaluating such currencies. So in the future productivity of each nation will be their 'store of value', rather than a metal that produces exactly zero, and further it costs to warehouse and secure from the possible bandits that are still bent on thinking that gold has greater value than that of an industrial metal. I guess with the above statement, I have earned the right to be flamed by those who still think that gold will again be an $800.00 plus commodity.... My opinion only. (flame-proof suit on) Z.

To: Henry Volquardsen who wrote (117)	5/15/1998 9:58:00 AM
From: Chip McVickar	Read Replies (1) \| Respond to of 3536

Henry In order to counter the BIS in it's attempts to destroy the US dollar. There is a 'government-plan' in place for a reverse 2 for 1 split on the Dow Jones Industrial Average.....

To: Henry Volquardsen who wrote (117)	5/15/1998 9:09:00 PM
From: paul ross	Read Replies (1) \| Respond to of 3536

Sorry, Henry, didn't mean to dump any horse s^^t on your thread. A couple more comments (from Area 51), if I may. At some point the question seems to me not whether the US$ collapses vs. the Euro, but at what point the interest payments on the debt will be too large to sustain. Granted Europe may get there first and it may be later rather than sooner, but even in the "new era" we find ourselves, the debt continues to grow despite a "budget surplus". You commented: "But the Fed didn't buy any of those dollars"...From the Yahoo article: "...there was talk it (Japan intervention) had caused problems for the US Fed, which has had to absorb funds in the money market after it was flooded by dollars." Wouldn't that suggest the Fed was buying dollars, or is there another interpretation. Would a Japan. institution buying dollars hold them as dollars or in US paper (interest bearing). Also, the monetary base has increased but .1% over the past 3 mos., with M2 and M3 still growing at a healthy clip (>8%). Could this suggest the Fed is sopping up dollars coming home from abroad? And though it may be a stretch to view the BIS in such a light, what about the Yen carry trade, and the capital flows it has created into US bonds? From the other side, gold carry, it has been estimated that somewhere between 2 to as high as 8000 tons of gold has been leased by central banks. It has been suggested that some of it may have a hard time finding its way back if the price of gold were to rise, having already been sold into the market. Thanks for your comments.