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B4 The Bell Frieday September 24


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#346 soup

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Posted 26 September 2004 - 08:08 PM

Doc: I see an add from jimmy jones cramer on the tio of this page, what is up with that?
""Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory. Yet our high level bureaucrats, led by Alan Greenspan, exhort all Americans to consume still more of their seed corn and seek still more fools." N. Hultberg

#347 Dustbowl

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Posted 26 September 2004 - 08:11 PM

Month end, quarter end this week. Not much will happen on the downside. Waiting, waiting, waiting,

#348 longOnUranus

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Posted 26 September 2004 - 08:31 PM

Month end, quarter end this week. Not much will happen on the downside. Waiting, waiting, waiting,

I suppose if they devalued the dollar we could get a drop, but it would be spun bullish for equities fairly quickly, after the T-bond exodus.

There is much going on in the world, yet earily quiet in the markets. More like a lot of people holding their collective breaths than distraction due to manic Souther Cal cluster parties.

I don't think they'll wait until after the election to exhale. Either Shrub or Kerry will have to have a big shovel to dig through manure pile, growing daily. The election is irrelevant.

Devaluation = no more Fukui stick saves.

#349 Butterfield 8

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Posted 26 September 2004 - 08:36 PM

holy cow, agent. maybe I should call my bank in Switzerland tonight.

#350 The End

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Posted 26 September 2004 - 08:38 PM

TPINX.
NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


--Waters

#351 brian4

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Posted 26 September 2004 - 09:00 PM

Nikkei opened up 25 points and fell off a cliff and dropped 125 now down 100. On Dollar devaluation it is hard for them to spin it positive the interest cost on the deficit will soar to the moon adding to the deficit and rates will have to move up or no one will buy the paper. ;)

#352 The End

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Posted 26 September 2004 - 09:02 PM

If they do agree to devalue the doo-lar, it will becuase the US wants it. They have wanted it for the last two years. It will drop further. It is the only way we will be able to pay the creditors back. (if we do)
NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


--Waters

#353 The End

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Posted 26 September 2004 - 09:05 PM

What is the definition of inflation?

We might see deflation first or not but, inflation will rip eventually.

I know the definition. Newbies, look it up.
NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


--Waters

#354 NWD

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Posted 26 September 2004 - 09:15 PM

Can the U.S. government decree a falling (or more rapidly falling) dollar without some cooperation from trading partner states?

I recall reading that, in the '30s, there was a pattern of "competitive devaluations" in which nations refused to acquiesce in devaluations decreed by other nations and everyone tried to make their currency cheaper against everyone elses.

#355

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Posted 26 September 2004 - 09:15 PM

What is the definition of inflation?

We might see deflation first or not but, inflation will rip eventually.

I know the definition. Newbies, look it up.

Got gold? / got silver?/ Take delivery!

#356 Hiding Bear

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Posted 26 September 2004 - 09:32 PM

Nikkei opened up 25 points and fell off a cliff and dropped 125 now down 100.  On Dollar devaluation it is hard for them to spin it positive the interest cost on the deficit will soar to the moon adding to the deficit and rates will have to move up or no one will buy the paper. ;)

That's about right - the bond market would not be a winner. Japan and China would have less need to intervene, and would buy less Treasuries.

The IMF is coming to the realization, like in the article I posted last Tuesday, that the current account (trade + interest payments) situation of the US is hopeless - already running a deficit of more than $600 billion per year (i.e. the US must borrow that much from other countries). The question is not whether the dollar will fall but when. They are attempting to front run this with a controlled devaluation of the dollar. I mentioned last year then would eventually become official policy last year - it's just a matter of time before the Treasury or even AG starts suggesting a devaluation would be acceptable.

Keeping in theme with the IMF's blatant move to push the US towards inflation, they are also thinking of issuing new "SDRs". To oversimplify, essentialy SDRs are money issued by the IMF. Just think of it as another central bank issuing fiat money.

If both the devaluation and SDR issuance transpire, gold and silver will be on a rocket ride and may never see the current levels again.

When the International Monetary Fund meets next week in Washington, it is hoping to persuade the U.S. to approve its no-strings-attached, multi-billion-dollar foreign aid expansion. If that sounds odd at a time when U.S. resources are already stretched, wait until you see the list of beneficiaries.

The new IMF financing would make Iran eligible for a total of $465 million, Syria would be entitled to $90 million, Robert Mugabe's Zimbabwe $115 million and Sudan $100 million. Oil-rich, authoritarian Venezuela would have $840 million and the gentle junta running Burma $80 million.

The proposal, launched in 1997 by the Clinton Administration and Britain, is about increasing the "special drawing rights" pool at the Fund. SDRs, which are paper receipts that can be exchanged for real money, originated under the gold standard as a liquidity tool for balance of payments shortfalls.

Ostensibly, the new SDRs would restore equity in the Fund since some new members have never received any SDRs and others' share of the world economy has grown. But as Mr. Lerrick notes, these goals could have been met by a reallocation of existing SDRs.

Which presents its own problems. First, despite the rhetoric, SDRs are not free money created out of thin air. They are receipts that borrowers bring to the window to be redeemed, usually for dollars, euros or yen.

Equally egregious is the lack of accountability in SDR accounting. SDRs are supposed to be "borrowed," but formal IMF policy states that they are distributed without condition and without any expectation of repayment.


http://search.ft.com...arch&state=Form

#357 brian4

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Posted 26 September 2004 - 10:09 PM

Further to HB's post and my earlier one, If I was an American...now would be the time to move some $ not only into Canadian, Aussie or Swiss currencies but also a time to do what the Sun did and open a Bank account in Canada which you can denominate in either Canadian or U.S. $'s and certainly Canadian $'s would be the one to hold. In the last U.S. devaluation in the 70's a $ Canadian was worth $1.35 U.S. Also there is a good chance currency controls will be imposed to stop what I just described-i.e. the flow of money out of the U.S. to safe havens because as money flows out the $ drops even more. The other thing to be aware of in a devaluation is that import prices will rise drastically as more $'s are required to buy them. The flip side is the price of U.S. exports will drop making them more competitive in the World marketplace. The sad part is aside from Airliners and Foodstuffs the U.S. doesn't export much, all the manufacturing has been moved to China. ;)

#358 NWD

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Posted 26 September 2004 - 10:14 PM

Exchange controls.

Thought occurs to me that fedgov could pressure US holders of foreign accounts to surrender them for dollars.

Or could pressure foreign governments to relinquish them to US government. Something along the lines of the "Litvinov assignment" pursuant to which US surrendered financial assets of expropriated Russian companies to the Bolshevik government.

#359 ConfusedAssRev1

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Posted 26 September 2004 - 10:15 PM

Does 20% devaluation of US Dollar imply $60 oil ($48/.8)?

#360 Shebear

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Posted 26 September 2004 - 10:22 PM

agent,

The link doesn't work.

I just got Larry T. He hints that Prechter could be correct about his long term call. :ph34r:

The one about SPX at sub 500? or something like that... :unsure:





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