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

To: X Y Zebra who wrote (673)	9/17/1998 11:34:00 AM
From: Lee	Read Replies (2) \| Respond to of 3536

Thread, This article covers much about our discussion. aei.org Here is the lead paragraph. The Benefits of Devaluation in a Deflationary World By John H. Makin There is a compelling need for the Interna-tional Monetary Fund, finance ministers, central bankers, market analysts, and headline writers to learn the difference between the dangers of currency devaluation in an inflationary world and the benefits of currency devaluation in a deflationary world. Policy makers, far more accustomed to an inflationary world than to today's deflationary world, have failed to make the distinction. That failure has cost Asia and now Russia dearly. Some market analysts and newspapers continue to create dangerous and unnecessary confusion about the cause of falling stock markets worldwide. Headlines are trumpeting the view that global equity markets are falling because of currency weakness. This makes no sense and seriously muddles cause and effect. Regards, Lee

To: X Y Zebra who wrote (673)	9/23/1998 4:36:00 AM
From: flickerful	Respond to of 3536

Fed official hints at cut in US interest rates By Clay Harris in London and Neil Buckley in Brussels A senior Federal Reserve Board official yesterday nudged market expectations towards a possible US interest rate cut, ahead of Senate testimony today by Alan Greenspan, the central bank's chairman. William McDonough, president of the Federal Reserve Bank of New York and deputy chairman of the Federal Open Market Committee, which meets next week to consider any change in rates, said: "I believe the balance of risk has shifted from one about inflation to one of concern about adequate growth." Mr McDonough cautioned that this view, based on anecdotal evidence in the US about investment plans, job reductions and consumer confidence, should not be taken as an indicator of what the FOMC would decide or even how he would vote. His comments in London were also largely a restatement of comments made two weeks ago by Mr Greenspan, who is to testify to the Senate budget committee about global economic issues. Mr McDonough said markets had over-reacted by concluding that a statement from the Group of Seven leading industrial countries last week pointed to co-ordinated interest rate cuts. G7 members had recently changed rates - up by Canada and down by Japan - for their own reasons. His views were echoed by Wim Duisenberg, the European Central Bank president, who yesterday ruled out a co-ordinated cut in interest rates with the US. He said the priority for Europe, with only 100 days to go before the launch of the single currency, was to continue the process of interest rate convergence. Rates in much of the euro-zone, he added, were "significantly" lower than those in the US. "We don't want that process to be interrupted by moves in interest rates co-ordinated with whomever, and especially not with those with significantly higher interest rates." Interest rate cuts alone, he warned, were not enough to solve the economic crisis. Mr McDonough said he hoped the single European interest rate would be as close as possible to the lower rates in the zone in Germany and France.

To: X Y Zebra who wrote (673)	9/24/1998 2:39:00 PM
From: X Y Zebra	Read Replies (1) \| Respond to of 3536

OT With the recent turmoil in the emerging markets, Little Joe (Pepito), asked his father to explain to him how exactly is it that governments in Latin America, really work, and end up in the incredible messes that they get tangled in, so as to force all the 'first world' bankers to come to their rescue. So in earnest, Pepito's father explained the following: Son, in order for you to understand this economic mumbo jumbo, let me put it to you this way. We will use as an example, our own household: Your Mama is the Government. Your Father is the Federal Executive Branch. Your Little Brother is the Country. The Maid is the Federal Legislative Branch. And You are the People. So Pepito went on his way, thinking about this explanation. That very same night, Pepito's little brother (six months old), was screaming his head off in his crib. Pepito finds him totally covered with caca. He goes to see his Mother asking for help, but finds her sleeping. He goes to see his Father, only to find him fornicating the Maid. Next morning, during breakfast time, Pepito proudly announces he has understood how is it that Latin American government really operate. He proceeds. Take for example last night, the situation was "de la Puta Madre", (let's translate that as "a mess" <g>). Since, according to the explanation you gave me of the GOVERNMENT and how it relates to our household, we had the following: The Country was full of caca. The Government was, as usual, sleeping. The Executive Branch was fornicating the Legislative Branch. And the people, made a complete pendejo, without knowing what to do. Sal£d Compadres.