No one's talking about the "stealth" bear market in the US dollar. A new benchmark has been reached now that it takes over $2.00 (US) to buy one British pound. Economists call this "exporting your recession" as our products become cheap in other countries.
4 comments:
I would go so far as to say there is significant "stealth" inflation. Since the M3 is no longer published its easy to see how the supply is also part of the fall in the dollar.
The site below (nowandfutures) has reconstructed M3, and their numbers look solid to a non-statistician. This explains a lot of the rise in the euro and gold.
http://nowandfutures.com/key_stats.html
Dear Kumbu,
I agree with your analysis. Inflation, as I'm sure you are aware, can be a stock market stimulant in moderate amounts.
Thank you for the excellent observation.
Deborah
Hello Deborah,
Do you have an opinion on when the Bank of Japan might next raise interest rates? (Likely a key factor behind liquidity.)
Thanks sincerely, Jim P.
This Bloomberg story (dtd 03-20-07) notes: "Political pressure ahead of an election in July will also make it difficult for the bank to tighten credit until the last quarter of 2007, Yamazaki said. Business confidence in Japan probably fell from the highest in two years amid concern the U.S. economy may slow, the bank's Tankan survey may show next month."
here's the link:
http://www.bloomberg.com/apps/news?
pid=20601101&refer=japan&sid=aH5Zr
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Dear Jim,
I don't know when the BOJ may raise rates. I doubt that they want to de-rail their economic expansion, so I would not bet on an increase soon.
Thank you for a great question,
Deb
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