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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (1533)	10/12/1998 4:05:00 PM
From: sea_urchin	Read Replies (2) \| Respond to of 81310

Papaya : I think it's a lot more serious. Naturally, the herd will follow the herders, but this time I think it's more like the Pied Piper leading the children into the mountain! As I read it, the powers that be have decided the game is now to support the yen and Japanese market rather than the $US. So, we will see the undoing of dollar denominated positions in favor of yen (or other Asian currency) denominated investments. They hope this will lead to a reversal of capital flows to the US. (Which, in turn, must have serious implications for the $5 trillion US debt, but that is another story) How a rise in the value of the yen can improve the Japanese economy is a riddle which, I imagine, only Central Bankers can answer. In my opinion, Japanese exports have to go down the tubes. So, the answer must be that word "confidence". By supporting the Japanese market and currency, someone must believe confidence will return to Japan and the Japanese will then get up and start spending themselves out of recession/depression. And, in turn, confidence will return to the world economy and the Dow will reach 9000 before Christmas! And so, Rubin and Greenspan will share next year's Nobel Prize for Economics! (Meanwhile, as result of the dollar devaluation, the Japanese holders of US Treasuries are taking a bath on their investment. But, we won't talk about that, either) The US economy has been driven by massive debt. The US, as we know, is the biggest debtor nation in the world. Debt which, to a considerable extent, has depended on foreigners to satisfy. In turn, many foreign economies have become virtually capital-starved as foreign investors have taken advantage of the insatiable US demand. In turn, these economies have now collapsed, or are as near to it as makes no difference. This has made US debt even more attractive to the foreigners......and so on. The IMF will then be asked to lend US money to the cash-strapped countries who, in turn, will re-invest the money back in the US. Long-term, fixed capital has given way to a merry-go-round of speculation. The world has become one big casino centred on Wall Street! Clearly, if the state-of-affairs leading to this viscious cycle is not broken, a world "capitalist" economy is completely out of the question. In fact, the world economy will be ruined. It may yet be. In the light of this realization, the present apparently absurd movements in the currency and stock markets make some sense --- at least, to me.