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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (34133)	11/22/1998 9:30:00 PM
From: Skeet Shipman	Read Replies (1) \| Respond to of 94695

Hi tippet, I believe economic factors can alternate their relations between cause and effect through the economic cycle in inflationary verses deflationary environments. Like many systems they have bounds beyond which the system becomes unstable, non-self-correcting, reversing the normal relationships, spiraling away from control or convergence. At this point, the interest rate differential between Japan and the US is both the result of and producing stress in our global currency economic system. A simplistic view is we reached this point because the US wanted to maintain a premium for foreign financing of its debt; and Japan kept lowering its interest rates to increase profits from performing loans in their banking system.(I believe they lower them beyond their critical bound.) If you run a simulation model, it amplifies short term phenomenon in an unstable manner. Skeet