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.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (71075)	10/9/1998 4:11:00 PM
From: Lee	Respond to of 176387

Yiwu,..Re: Secret deal on $US-yen dive Thanks for the article about the secret deal regarding $/yen valuations. I think it's highly unlikely that the US would agree to something like that, even to stabilize markets. For one thing, a weaker dollar automatically negates any interest rate cut the Fed does and biases the CPI further upward. For another thing, there is no reason to de-stabilize global markets, (commodities are generally priced in dollars) when the Japanese haven't shown any progress on extracting themselves from their current economic situation. I have particular problem with the following remarks. Re: A strong yen is good for Japanese banks because every Y1 fall in the currency's value against the $US forces Japanese banks to cut their assets by Y1 trillion to maintain their capital adequacy ratios at the minimum level demanded by the Bank for International Settlements. Banking reform has been the foremost issue in restructuring the Japanese economy and this would simply provide additional time to drag out the inevitable. Re: "The US has abandoned its strong dollar policy in favour of rescuing the Japanese banking system, which it sees as the biggest problem in the global financial system," said Mr Ken Landon, currency strategist at Deutsche Morgan Grenfell. This is an unbelievable statement. Even if everybody concedes that the Japanese Banking system is the biggest problem in the global financial system, there is no way that the US would single handedly take on the job of rescuing an institution which hasn't done anything so far to help itself. Re: Mr Bulchandani said the change in the strong US policy was bad news for the world economy because a falling dollar made it less likely that the US could continue to be the growth locomotive for a faltering world economy. This is an equally unbelievable statement because our greatest bull run started with the dollar at 80 vs yen. This decrease in dollar is a plus for multinational corporations and for US commodities. Furthermore, for oil importing countries, this decline can be viewed as a tax cut. So as far as a weaker dollar inhibiting US growth, I think it gives US companies an edge in an ever more competitive environment. Regards, Lee