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.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (43118)	1/12/1999 10:09:00 PM
From: Bonnie Bear	Read Replies (1) \| Respond to of 132070

Here in the bay area the foreign nationals run to the gold store to convert dollars to gold coin without stopping to breathe.

To: Earlie who wrote (43118)	1/12/1999 11:31:00 PM
From: banco$	Respond to of 132070

Fed's decisions are certainly getting tougher as you say. Which way to run? Interesting point about "borrowing premium;" we'll hear several spins on the divergence if it continues. -g-

To: Earlie who wrote (43118)	1/13/1999 7:30:00 AM
From: valueminded	Read Replies (2) \| Respond to of 132070

Earlie I disagree with you and Mike. AG will cut rates and cut often in an attempt to prevent the market from imploding. He will continue to add to reserves and continue to expand the money supply. He feels he has unlimited freedome by the "lack of inflation" which after you are done ignoring everything from food prices to energy to tobacco may be true. Bottom line is bottom line, prices are going to increase as the value of the US dollar is overwhelmed by the supply. (imo) You said it yourself, the view is not prevalent from foreign nationals that AG would cut ... The other thing, is that out of all the economies, the US appears to be in the best shape. Which "gives AG freedom to act". I do not disagree with the need for huge capital inflows to the US, but I do see the US bond tanking, interest rates up, and inflation for the US. Not necessarily world wide - due to worldwide overcapacity per M.Burkes and other comments. (imo) I also found it interesting that the PPI was completely discounted and virtually all analysts expect today to be a big upday, (presumably due to the bargains created at PE's of 31 vs 32 the day before)

To: Earlie who wrote (43118)	1/13/1999 11:20:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Earlie, The bull case would be that foreigners don't matter to aircraft carrier America. <G> The numbers disagree, so let's throw out the numbers. One thing Brazil has done has been to widen the very spreads that AG feared when doing his reckless triad of rate cuts. Everyone who was buying corps and brain dead mortgages and shorting T-Bonds is now sucking wind again in one swell foop. That includes all the money center banks who bought on under the table early alerts of the Fed's rate cutting surprise. And it makes those LTCG spreads look mighty puny again. I hope those dudes hurried up and claimed their bonuses. <G> Almost unnoticed is the fact that the Yen has been powering up against the buck, making the rise in our markets totally meaningless to the Japanese savers. In fact, given the timing of their trades, buying near the top early last year, I believe they may have lost the 40% you mention. Then we get higher rates in Japan, making the Yen even stronger. I think govt. intervention will be short lived. The main hangup on the buck is volatility occasioned by overprinting. The Euro will probably hang tough avoiding overprinting until it gets firmly established. That makes it a viable alternative to the flaky-jake buck right out of the box. Personally, I would buy Swissies, but that is too small a currency for the huge central banks. The Euro or the yen will be the plays. So, if he cuts rates, the buck and corporate/mortgage bonds eventually get much weaker. If he raises rates, the buck and the corp/mtge bonds eventually get much weaker. Either case will be a drag on stock prices. MB