Re: US DOLLAR CRASHING. DUMP IT QUICKLY1

[EMAIL PROTECTED] (LT Lee) wrote in message news:<[EMAIL PROTECTED]>...
> Social Americans <[EMAIL PROTECTED]> wrote in message news:<[EMAIL PROTECTED]>...
> > E. Barry Bruyea wrote:
> > 
> > > On Thu, 27 Nov 2003 22:06:09 +0800, "Yamashita"
> > > <[EMAIL PROTECTED]> wrote:
> > > 
> > > 
> > >>The US Dollar is on the verge of crashing. The expected windfall from the
> > >>invasion of IRAQ did not materialise to give the Americans the psycclogical
> > >>boost to their faltering economy. 
> > 
> > It is supposed to be a psychological boost for other countries around 
> > the world to buy, hold and use dollars.
> 
> Not anymore. 

Add to that that the US economy is supposed to be turning up and the
european one stagnant, yet people are still dumping the $. Now think
how much more $ they'll dump when the situation reverses.

Mark K.




> 
> -----------------------
> Foreign Lenders Bolting? + Trading Notes
> 
> By: Rick Ackerman, Market Wise Black Box 
>  
> How much longer will foreigners continue to support America's $1.5
> billion-a-day borrowing habit?  Figures released by the Treasury
> Department yesterday indicate they may already have turned off the
> credit spigot.  Net capital inflows into the U.S. plummeted from $50
> billion in August to $4.2 billion in September, implying that foreign
> investors have recently begun to direct their surplus funds elsewhere.
>  Sales of Treasury bonds accounted for nearly $20 billion of the
> slippage. While foreigners bought a net $25.1 billion of Treasurys in
> August, their purchases in September netted out to just $5.6 billion. 
> The reversal was even more decisive in the mortgage markets, where
> they sold a net $3.2 billion of Fannie Mae and Freddie Mac paper after
> buying $8.9 billion of it the previous month.
> 
>  
> 
> Because the selling has been mostly from private accounts and hedge
> funds rather than by central banks, it is unlikely the trend can be
> reversed by mere political jawboning. It is global market forces at
> work, after all, and the selling could intensify beyond remedy if
> perceptions of the dollar should take a serious turn for the worse.
> With the current-account deficit expected to reach $550 billion this
> year, foreign credit has become essential to America's day-to-day
> business. The trade deficit has burgeon steadily since the early
> 1990s, but the offset of increased foreign lending has prevented it
> from becoming a crucial problem.
> 
> Recovery in Jeopardy
> 
> Until now, that is; for, our dependency on foreign money to bridge the
> gap between what Americans earn and what they spend has grown to the
> point where even a relatively small shift out of dollar assets by
> global investors could jolt financial markets badly enough to derail
> the U.S. economy. Meanwhile, significant buying of U.S. assets by the
> Japanese has long been an important prop for the dollar.  Most
> recently, the Japanese bought a net $20 billion worth of our bonds and
> equities in September, impelled by the need to boost exports with an
> undervalued yen. They are acting in self-interest, of course, but
> their motive could take an ugly turn toward self-preservation if the
> rest of the world should start dumping dollars. That is one reason why
> I will continue to recommend gold assets, and to regard each and every
> dip in the price of mining shares as an opportunity.