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

To: Robert Douglas who wrote (541)	9/1/1998 3:36:00 PM
From: Chip McVickar	Respond to of 3536

Robert, Good article... The problem is with perception. Yes....economists, ECU publicists and european bureaucrates may want the euro to be stronge, but the currency traders may not agree. Yes....the dollar/yen may come under some initial pressure as reserves are realigned to accommodate the ECU.....But the fact remains the coalition will be untested politically and monetarily. Will all the envolved political structures agree with Germany's need to increase its'investments in Russia and allow a further increase in debt their balances (as an example). I believe the dollar will be drawn down modestly and then return quickly to ranges we are familiar with today. Remaining at these levels until such time as the ECU has been tested....probably years. However....significant volitility could also follow the ECU's introduction as this floating currency system struggles with debt structures, political unrest, currency devaluations and the introduction of a New Toy to play with....in any case I expect the dollar to remain stronge throughout the process. That is unless something unexpected alters the story. A non-professionals opinion Chip

To: Robert Douglas who wrote (541)	9/1/1998 4:34:00 PM
From: Lee	Read Replies (1) \| Respond to of 3536

Robert, My question based on the article is reducing 60% by how much? We have 61.5% USD, 14.2% DM, 7.4% Yen, 16.9% (?). How much of a % does an untested euro get? 25%? My default WAG is the euro to be replacing currencies that account for about 25%. Could it be that the 60% goes up at first? Regards, Lee

To: Robert Douglas who wrote (541)	9/3/1998 3:01:00 AM
From: Frodo Baxter	Read Replies (1) \| Respond to of 3536

How did exactly did Krugman become the architect of the ASEAN monetary system anyway? Hanke's sound money currency board system gets mocked, while Krugman's pie-in-the-sky unsound money exchange control system gets adopted? How bitterly ironic. Let's see how Malaysia's plan will work... a) peg the currency at higher than market, then prevent market forces from correcting it, b) lower interest rates and print lots of money, c) declare victory. Hmmm, interesting how easy international finance really is, n'est pas? Paul Krugman, the Karl Marx of capitalism.