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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: TimbaBear who wrote (8519)	4/21/1999 11:41:00 PM
From: MikeM54321	Read Replies (2) \| Respond to of 9980

TimbaBear, Another way to look at it (extremely simplified). The greenback leaves the US when the US buys foreign goods. Say, next month we want to buy more foreign goods so we need more greenbacks. Pretty soon, the foreign country has to be willing to send the money back (finance US debt)in order for us to buy more of their goods. It's an endless cycle that has gone on quite well. Even though we are importing like crazy, foreigners have been willing to loan that money back like crazy because they love the greenback during all the turmoil in their home countries. Hence the US interest rates are low (more incentive to spend) and the greenback has maintained it's strength (more incentive to spend). And spend we do. As a side note, many were predicting that the Euro was going to upset the apple cart. A lot of economists were very worried that the Euro was going to be an alternative to the greenback and our interest rates would have to go up to keep attracting foreign investors. Well it really never happened. Same time Euro was put on the market, Europe started to have fears of a slowdown. Hence it lost it's luster and has steadily fallen for months now. Just another spinning plate balancing on the end of a stick. Ain't it all truly amazing? MikeM(From Florida)