Forex Futures Forum Archive for 01/26/2005

Mtl JP 21:45 GMT January 26, 2005 Reply   
nh 21:39 / perhaps you have missed my 19:31 GMT January 9 on POL, and in particular: ..."The poorest will not be the ones to suffer the most in a crisis: usd non-holders won't have anything to lose to worry about. " ... It's like they will be just slightly - but crucially, albeit perhaps unwittingly - ahead of time LOL

Livingston nh 21:39 GMT January 26, 2005 Reply   
JP --- One more detail - nobody ever answers this question altho I have posted it many times many ways -- Who holds the BAG when the US current account starts to shrink?

Livingston nh 21:34 GMT January 26, 2005 Reply   
JP - did Fan really say "the issue for China isn't whether to devalue the yuan" - nobody is looking for a Devaluation --- this is all pre G7+ bargaining -- somebody on the Forex Forum put up the old "currency basket" gem -- China has to float - until the currency is out there and traded nobody knows what it's worth

Between you on the economic front and Ltn th on the political side it certainly looks like the US is "DOOMED, DOOMED I say!" -- calm down and stop looking for the collapse of civilization

Mtl JP 21:11 GMT January 26, 2005 Reply   
clarification: not the entire post, just the AP news piece

Mtl JP 21:10 GMT January 26, 2005 Reply   
nh 14:29 / Bush's babble, and increasingly US as whole under his stewardship, are becoming increasingly isolated and risk being irrelevant soon. Don't get me wrong: I am not saying US is sinking to the level of Zimbabwe on world stage. Just reading from a series of, but not limited to this example: - emphasis is my own: "DAVOS, Switzerland (AP)--China has lost faith in the stability of the U.S. dollar, and its first priority is to broaden the exchange rate for its currency from the dollar to a more flexible basket of currencies, a top Chinese economist said Wednesday at the World Economic Forum.

At a standing-room only session focusing on the world's fastest-growing economy, Fan Gang, director of the National Economic Research Institute at the China Reform Foundation, said the issue for China isn't whether to devalue the yuan but "to limit it from the U.S. dollar." (post comps GVI colleague)

Livingston nh 14:29 GMT January 26, 2005 Reply   
The next two weeks will be interesting - the US budget deficit estimate released by the Administration yesterday was 427 bio and some of the domestic initiatives will be described in the State of the Union Speech on Weds Feb 2 and then in detail in the Budget submission to Congress (the actual deficit will likely be 450+ bio as the supplemental war appropriations, not included in yesterday's 427 bio are added in) -- a 4% growth rate in the US econ would cover the deficit and the wild card this year is TAX REFORM (reform is political code for tax hike) // in the afternoon of the president's speech the FOMC (2 day meeting) will announce the latest rate hike and the still cryptic message to the market - this Fed is looking at a Guns and Butter economy
// January employment and G-7+ are next up -- after big revisions last winter the Q1 employment (especially wage and hour numbers) will be a barometer of growth pressure in the US -- the G-7+ meeting may be significant (for a change) because EURO folks will not get a very sympathetic hearing unless there is a willingness to cut rates but the US spending will be a target for EURO folks and China (like the lady who doth protest too much) will make "reluctant" concessions to set a wide band (revaluation to a new fix is just silliness at a different level) which will help the country prepare for a float before the Olympics but the question is "What does China get?" -- Japan would be a major beneficiary of such a move because of its trade with China - a couple of PBoC rate hikes and a still fixed HKD - TWD and other Asian currencies could see more flows and volatility

Place your bets!!