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To: Mohan Marette who wrote (70811)	10/8/1998 6:12:00 PM
From: hsg	Read Replies (1) \| Respond to of 176387

Not when the US $ drops 12% in 3 days

To: Mohan Marette who wrote (70811)	10/8/1998 7:03:00 PM
From: Paul Merriwether	Read Replies (1) \| Respond to of 176387

<< Greg: Not unless our rates get lower than Japan's which is close to zero,I belive it is something like .5 or .25 or something.So people can still make money borrowing from Japan and buying any US treasuries. >> I'm no economist, but doesn't your argument presume a constant exchange rate between dollar/yen. If yen keeps rising against the dollar, any gains made on the yield could be overshadowed by the relative strengths of the currencies. Your argument also assumes that the Japanese rates will stay at the level forever. Its possible(although admittedly unlikely short term) that Japanese economy will overheat etc. to force such a rate hike.