k9s-4-k8

A Strong U.S. Dollar Isn't in Anyone's Best Interest

Dave, Where are you buying that kool-aid? While Europe does have a somewhat different set of problems, it has more to do with policies that stifle innovation and instead look to reward those who suck from the teats of government aid, but that's another issue.
While the U.S. mortgage backed debacle is at the root of this recession, European bankers were reticent about doing their own homework regarding the viability of the mortgage backed securities they were investing as well as the amount of leverage they used in order to benefit a few extra basis points. This is the same irresponsible risk management that American banks pursued. No difference. But Europe is actually worse off. Most of these countries have the majority of their money in just a handful of banks. A number of these same banks used 40-1 leverage. On top of that, they don't have sustainable consumer based economies. Their economies are supported by exports, and tourism. They're dead in the water till the U.S. economy recovers.


On Apr 03 10:19 AM Dave Wrixon wrote:

> Europe has a different set of problems to the US. Europe's problems have been largely caused by the US, but are generally less severe, although there is precious little recognition of this. Consequently,
> Europe is still being protective of its inflationary postion, which
> is probably largely justified, even though there have been significant
> efforts to stimulate.
>
> The pig-headness, largely stems from the American assumption, that
> the Europeans must unquestionably do as they are told to help solve
> the US's problems, even though their is little consensus that American
> leaders actually have a clue what has happened or what to do about
> it.
>
> If America is to get cooperation in resolving its crisis, then these
> Neo-Imperialist attitudes will not help, either vis-a-vis Europe
> or anywhere else.
>
> Having said that I am sure that will join me in lauding Obama for
> addressing one of the most obvious issues, which is the over-investment
> in military hardware, which frankly the US economy can no longer
> support.

Looming Currency Devaluations

Who said anything about the US Sec Trea devaluing the Yuan? Its pegged to the dollar by the Chinese. I think everyone else knows the US can only jawbone it with the Chinese as many in Congress already have, and Geithner did during his confirmation hearing. Another thing countries can do as according to International trade rules is label another country a currency manipulator, but you won't see that happen. In fact, you aren't going to hear the administration speak again about China needing to revalue the Yuan.


On Feb 27 12:14 PM boats.j wrote:

> The Author wrote:
>
> "...China’s trade balance turns negative, the US Treasury Secretary
> will be faced with a stark choice. Either the Yuan depreciates or
> the People’s Bank of China must sell US Treasury holdings to support
> the currency."
>
> How does the US Sec Treas devalue the Yuan? He doesn't! He Can't!
> So, what smoke are you blowing here?

The Poor, Poor Dollar

I surely don't expect the Euro to strengthen for more than a short while. Their banking system is actually in worse shape than ours.

Hawkish Comments From ECB Send Euro Higher

I suppose they got tired of so many Euros moving into treasuries over the last couple of months. The Euro was turning into toilet paper. I really don't know this is anything more than simple rhetoric that will be reversed next month.