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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Gary D who wrote (5518)	6/13/1998 10:57:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 42834

The Dollar, The Yen, Interest Rates, and Greenspan's Testimony I caught Greenspan's Testimony before Congress while I was in the Windy City and heard an interesting analysis by an analyst at Salomon Brothers. This analyst basically stated that Greenspan is letting the dollar run up in value against the yen to avoid raising interest rates. He is letting the strength of the dollar do his rate raising for him. The scenario is that as the yen weakens in value, Japanese imports become cheaper, more imports come forth into the United States and United States corporate profits from large multi-national corporations decrease and the labor market weakens, (read that to mean unemployment rises). This, in effect, slows the domestic economy and places pressure on the equity markets to form an equilibrium at a lower level. That is, the stock market falls in value. Although the effects of whether or not this will occur are still unclear it was evident that if it did not, and if the labor market remained strong, Greenspan was willing to consider raising rates to weaken the labor market sometime later this year. Any comments...?