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When too much debt infects the heart of capitalism you either default or inflate it away and the latter is by far the easiest (although not necessarily the wisest) policy. Foreign governments and central banks may be willing buyers of bonds in order to support their own economies and the Fed may be a monopolistic mispricer of credit at negative short-term yields, but that is no reason for the knowledgeable investor to play the same game. Investing in “reflatables” and borrowing with conservatism at the short rate are the two best ways to prosper in such an environment.
Забележете, either default or inflate. Очевидно второто е избора на Fed за ужас на любителите на долара. )
Similarly, this time around, we are getting by with a lot of help from
our new-found friends – not Native Americans, but native Chinese and native Japanese. How so? By their
and others’ central banks recycling the dollars we send abroad in payment for our imported goods and
services. These dollars are recycled into U.S. government and agency securities held in custody accounts
for them at the New York Fed. In the 52 weeks ended November 19, these custody holdings averaged
$918.1 billion. This is up $150.8 billion from the average of foreign central bank holdings of U.S.
securities in the 52 weeks ended November 20, 2002. This $150.8 billion increase in the 52-week
average of foreign central bank holdings of U.S. securities represents about 27% of the estimated $560
billion 2003 current account deficit. This is up from about 13% in 2002.
This rise in foreign central bank financing of the U.S. current account deficit implies that the appetite for
dollar-denominated assets on the part of private global investors is diminishing at current market prices.
If it were not for the fact that foreign central banks have become the buyers of last resort for dollar-denominated
assets, the greenback would have fallen even more in value versus other currencies than it
has, U.S. prices for goods and services would be higher than they are, and U.S. long-term interest rates
would be higher than they are. If it were not for the “kindness” of foreign central banks, we would be
sitting down tomorrow to a smaller feast in a smaller house, having arrived at Grandma’s house in
smaller car. So, just as the original Plymouth Pilgrims gave thanks to their “foreign” friends, the Native
Americans, for their help in producing a bountiful first harvest, tomorrow we should give thanks to our
foreign friends, central banks, in financing at very favorable terms the importation of a bountiful foreign-produced
“harvest.”
The foreign suckers who produced this bountiful harvest for us, however, should be cursing their central
banks. All they are getting in return for their hard work is more paper – that is, yuan and yen, which are
reducing the value of the yuan and yen they had accumulated before.
forexboy, много съм съгласен с теб
може би ще добавя над 1.2250, а ако преминем high-a, ще се стопирам някъде около 1.2245 и ще си гоня таргета, така съм решил поне
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