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 : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (2005)	10/7/1998 8:17:00 AM
From: Kip518	Read Replies (3) \| Respond to of 3339

any thoughts on the crashing dollar relative to mark and yen....seems rather extreme not to mention inflationary tendancies it might create... Joel, here are my thoughts: In recent weeks, the Japanese has seen their investment in U.S. treasuries skyrocket (along with everyone else). If there is any reasonable possibility that their own stock market has bottomed (and I'm certainly unwilling to bet it has, but I can imagine a hell of short-covering rally starting there soon), then it is clearly time for them to sell T-bills and buy their own market. Repatriation of dollars to yen will make the dollar continue its slide relative to yen & do real damage to both our bond and stock markets. (Obviously, a weakening dollar won't only be relative to the yen but to other currencies as well, making makes foreign investments in the U.S. markets less attractive to Europeans, as well...except to buyout American companies.) Given the collapse of commodity prices world-wide, continuing overproduction of capital and consumer goods, and deflation of market-based assets, with no turn around in sight, I don't expect a declining dollar to create an inflation worry...only a market worry. It was, I believe, no coincidence that one of the greatest moves in U.S. market history ran in reverse parallel to the decline of the Japanese market. The falling dollar (which will only be made worse by continuing decline in U.S. interest rates) spells big trouble for both the bond and stock markets. At one time during the 30's depression, U.S. treasury bonds sold at negative yields. People were will to pay anything to preserve at least some portion of their capital. Could happen again. Kip