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

To: Bobby Yellin who wrote (5511)	4/24/1999 7:59:00 PM
From: Hawkmoon	Respond to of 81900

what are the implications for the dollar and our trade deficit? Morgy, Who holds those dollars?? The people who sold us the goods right?? The Chinese, the Japanese, the Europeans.... etc, right?? What are they going to spend those dollars on?? Where are they going to store those dollars where they will retain their value?? US T-Bills.. maybe?? US stocks?? And they will continue to do so until their economies recuperate and they find greater value in holding their own or some other competitive currency/asset. I'm not saying that we can maintain such extensive trade deficits forever, but without it, the rest of the world would go to hell in a hand basket, lacking any market into which to sell their goods, and we'd be on the fast track to global depression. As for wage inflation, compare the purchasing power of the average salaried worker of the early '60s to his purchasing power now. And so long as productivity increases match the relative wage increases, equilibrium can be maintained. (according to Alan Greenspan). Greenspan watches wage inflation very closely from all indications I have read. Increased wages definitely have a long-term impact on inflation and that may be something that hurts us long-term. That would definitely cause gold to increase in value, hike in interest rates, and a market "adjustment". Regards, Ron