Friend of Another
(9/20/98; 19:03:15 Msg ID:43)
To All: It's an interesting corner that the Euro people (BIS) have put the US government andthe dollar into. As the only reserve currency, the dollar must fall in value in order to reflate theworld economy. But, a week dollar is exactly what the Treasury doesn't need with theupcoming Euro. Now, all Europe has to do is wait and watch as the markets do their dirty work!If the dollar stays strong, the countries in crisis will sink even lower. In doing so this will createa US trade deficit never before seen in modern times.
It is no accident that most of the economies in crisis are many of the chief trading partners of America. It's also no accident that they all are IMF/Dollar advocates. Meaning, they hold littleGold and much US treasury debt as local currency reserves. The US will be forced, bydeteriorating market conditions, to lower the exchange value of the dollar. But, if Greenspanlowers local interest rates, Europe will begin to dump the dollar. For them, they don't need thedollar as a reserve currency anymore! They will hold a small amount of it only as an currencyexchange intervention vehicle.
With this new definition for the dollar it will be required to carry a good interest rate. Theyhave the Dollar in a trap that will force the Fed to lower it's value through the foreignexchange window. All the while pushing interest rates up or holding them steady to protectthis reserve currency.This isn't a strange twist as it happened once before during the 70's. Only this time a newworld reserve currency is coming online, giving many countries a choice for the first time. Ithink China can't wait to unload it's US treasury holdings for the Euro.
I agree with Another's last post (in the archives) about the vintage wine. Gold is that reservevintage that many people kept trying to open before it's time. By the end of the year, thecurrency wars will bring this fine wine to completion.
Once it goes above $360 some major defaults will occur, changing the entire aspect of themarket. Add to this the introduction of the Euro and the old US Dollar gold market willdisappear. Some investors are buying gold for the Y2K problem. I thing the Currency Wars willdestroy the markets long before Y2K does it's deed!
Also, I am very excited to hear of this USAGOLD FORUM. I think myself and Another will havemuch participation with this new discussion group! It will, no doubt, be followed by many Goldinvestors. Who knows, perhaps even a Central Banker or Government leader? Thanks FOA
Friend of Another
(9/20/98; 20:09:53 Msg ID:48)
We continue to watch the BOJ to see if they are selling US Treasury debt. I don't think that is