Re: FUTURE LOOKS BLEAK FOR THE U.S. DOLLAR...

You can find the answers by switching hats.  You are referring to
currency risk.  Big US internationals have some currency protection
but not dollar for dollar.  They usually report it as currency gain
(loss) in the Income Statement.  It tends to get discounted because
investors want to compare apples to apples in gauging year to year
gain (loss).    Yes, a California style budget crisis would have a
nasty effect.

I think the currency effect is greatest in the bond markets where one
invests for income first and appreciation second.  The great issue is
who will buy our debt ( read lend us money ).  No buyers means
interest rates must be cranked up and this is poison to the stock
market.

The Fed suggested it can hold interest rates low into 1st qtr 2004.
Perhaps.  If it cranks up rates before the economy shows clears signs
of smooth sailing then I would be standing next to the exit doors.

Slightly off topic, but I ask who will the Fed protect first?  The
stock market or the banks?

arthur
--
On 02 Dec 2003 03:05:25 GMT,  (UnclePete) wrote:
>>So you see there is no one answer fits all. 
>
>  Thanks for the analysis, but I was more concerned about foreign investors. If
>the dollar weakens, will they start to pull their money from the market and
>invest it somewhere else, or quite the opposite?