Forex Futures Forum Archive for 03/23/2005

SanFrancisco analyst 20:07 GMT March 23, 2005 Reply   
Amazing. They continue to cry fowl not over reality but over personal political goals.

Greenspan said he would stabilize, then revive the badly damaged US economy in 2001 and keep inflation in check. Political opponents cried fowl the whole way over every move/non-move.

Greenspan has delivered, end of story.

Now the challenge is to manage the re-balancing of the re-balancing of the once overheated USD, moderately increase rates and see that only moderate inflation arises. The political opponents are back on the bankwagon crying foul at every move.

Meanwhile, the US sets economic records dating back 40 years in some cases. Sure there is a deficit which results from necessary stimulous and needed military correction of one of the two elements (terror/Clinton recession) that caused the US economic abyss to begin with. But doesn't an almost dead car need gas???

Frankly, its amazing the US performance has seen under Greenspan during a global recession and Euro-socialist driven anti-trade agenda which has backfired.

The beginning of measured rate increases now begins to take the steam out of the "bubble" wishers, sees increased demand for US assets, stimulates saving, stimulates stabilization of the weak US dollar and continues the rebalancing/stabilization/vibrancy of the US economy.

Fortunately, even for you un-well wishers out there, the vibrant US economy under Greenspan means economic gain for the rest of the globe, even for those who are fighting it.

Cape Town 14:46 GMT March 23, 2005 Reply   
Right here seems the place to be! // Cyprus is the most expensive of the top 10 retirement destinations for Britons wanting to settle overseas. According to research by Prudential, based on a shopping basket of 10 commonly bought weekly goods, a typical Cyprus supermarket would set you back £20.06, while its equivalent in South Africa would charge a mere £9.18. Spain, the United Kingdom's most popular offshore retirement destination, is third cheapest at £12.73. In comparison, the same basket of goods in the UK costs £14.95. New Zealand is the second cheapest retirement destination after South Africa, with the basket of goods costing £11.95. Surprisingly, the United States come in fourth cheapest after Spain, at £13.82, followed by Italy at £14.47. The items chosen were a litre of milk, a loaf of bread, a medium jar of instant coffee, a kilo bag of sugar, 500g of cheese, six eggs, a standard bar of milk chocolate, a lettuce, a kilo of apples and a whole fresh chicken.

Cape Town 11:52 GMT March 23, 2005 Reply   
Property /// Local (South Africa) residential property prices are still soaring faster than any other market in the world, according to international real estate information portal ResearchWorldwide.com. South African home owners enjoyed average property price increases of nearly 28% over one year to the end of February. Meanwhile, markets that were once at the top of the performance rankings are cooling off, with Australia producing a relatively sober 2,7% annual increase over one year. Next best-performing market for one year according to ResearchWorldwide.com was Hong Kong (21,6%), followed by Spain (17,2%), New Zealand (16,4%) and France (16%). The United Kingdom market – popular among South African offshore investors – enjoyed an average 10,2% annual increase in residential property prices, only a little less than Norway and the United States (both 10,5%). In some countries, property prices are on the decline. In Germany, prices dropped by an average 1,3% over one year and in Japan prices dropped 6%.

Cape Town 11:48 GMT March 23, 2005 Reply   
South Africa has had the biggest fixed income fluctuation of ANY govt debt in the world over the last 3 months. Local FRA's were pricing in 70% chance of rate cut recently, now down to 10% chance...some even talking off interest rate hike by end of year.

Cape Town 08:26 GMT March 23, 2005 Reply   
Michael Kosares' comments /// The composite wholesale inflation rate is running about 5-6% using government numbers which everyone knows by now are low compared to the real world prices we all pay every day.

1. At 2.75%, interest rates are roughly one-half the inflation rate - and that's allowing the government the gift of its inflation rate.

2. The Fed doesn't meet again until May and there's a 90% probability it won't raise more than a .5% -- which still puts the interest rate significantly under the inflation rate. And that's assuming we don't get some surprise, out of the box numbers due to rising price of imported crude oil AND Chinese / Japanese imports.

3. The United States government is not interested in a strong dollar despite public rhetoric to the contrary, so it is difficult to envision the Greenspan Fed making the kind of radical interest rate hikes necessary to get the interest rate above the inflation rate, like Volker did in the early 1980s. There will not be a real rate of return on the dollar for some time to come.

Cape Town 08:04 GMT March 23, 2005 Reply   
If all those Asian central banks statements about reserve diversification were smoke with(out?) fire then they must be grateful for this dollar surge of late.