Re: Re: Re: Re: Re: Samir Amin: Not a Happy Ending
On Fri, 28 Apr 2000, M A Jones wrote: Hey, Russia posted a whacking bal of payments surplus last year and has done almost every year since 1991. Is it also a no-brainer to buy up some roubles right now? That sounds like a challenge to me. Only trouble is I'm not a Malt Man. But I'm willing to stake a case of 1995 Wehlener Sonnenuhr Auslese (JJ Pruem) on an appreciating euro. The spread is a EUR/USD rate of 1.00 or higher by May 2001. Since I'm going to be in hiding next year, running from Sallie Mae's creditors, my broker will be in contact with your broker. -- Dennis
Re: Re: Re: Re: Re: Re: Samir Amin: Not a Happy Ending
Jim Devine wrote: Eventually (in 1985-7), the dollar fell (in inflation-adjusted terms, using the trade-weighted measure), due to the large trade deficits (which had not yet turned into current-account deficits) and due to a convergence of US interest rates with those of the rest of the world. This is helpful but the real point is that previous dollar crashes (even Nixon taking it off the gold standard) have not affecetd the fundamentals of US hegemony. Why will it be any different now? If Wall Street goes, so will the world's other bourses; and when the world recovers, other things being eual, the US will lead the take-off. Plus ca change. Mark Jones http://www.egroups.com/group/CrashList
Re: Re: Re: Samir Amin: Not a Happy Ending
When it was launched the euro bought $1.16. Parity - where one euro bought one dollar - was deemed unthinkable. Today, however, one euro is worth just over 91 cents. . The problem for the euro is that throughout its life there has been a very attractive something else - the dollar. shouldn't the large US current account deficit signal a fall in the US$ and a rise in the Euro sometime in the near future? Jim Devine [EMAIL PROTECTED] http://liberalarts.lmu.edu/~jdevine
Re: Re: Re: Re: Samir Amin: Not a Happy Ending
Not if people expect the NASDAQ to go up 50% this year. Rational expectations, you know ... Jim Devine wrote: shouldn't the large US current account deficit signal a fall in the US$ and a rise in the Euro sometime in the near future? -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
Re: Re: Re: Re: Samir Amin: Not a Happy Ending
Jim Devine wrote: shouldn't the large US current account deficit signal a fall in the US$ and a rise in the Euro sometime in the near future? Why? Mark Jones http://www.egroups.com/group/CrashList
Re: Re: Re: Re: Re: Samir Amin: Not a Happy Ending
I wrote: shouldn't the large US current account deficit signal a fall in the US$ and a rise in the Euro sometime in the near future? Mark Jones asks: Why? because the current account deficit is larger than ever before, with US net indebtedness contributing via the income account. The dollar's high value is partly a result of the its special attractiveness as a safe haven (i.e., not due to relative interest rates), which is due to the high and bubbly US stock markets and the stagnation of economies outside the US. Since the stock market boom cannot last forever, and has in fact entered the bearish phase, the dollar will not stay high forever. Similarly, a lot of the world outside of the US is doing better compared to a few years ago and seems likely to continue to do so as long as the US avoids recession. (If the US enters a recession, that would improve its current account balance, of course, assuming that other countries are not pulled down too.) (Since both Europe and the US are raising interest rates these days, there's somewhat of a cancelling-out on that front as far as exchange rates are concerned, even though that has a negative effect on world aggregate demand. Since real GDP growth rates are not extremely out of synch between Europe and the US at this point, there's also a cancelling-out as far as exchange rates are concerned. Both of these growth processes are currently helping world aggregate demand.) We should remember that the dollar was also high during the early 1980s, having a decimating effects on US net exports similar to what's happening now. A lot of that was due to soaring US interest rates, but some of it was the "safe haven" effect. Eventually (in 1985-7), the dollar fell (in inflation-adjusted terms, using the trade-weighted measure), due to the large trade deficits (which had not yet turned into current-account deficits) and due to a convergence of US interest rates with those of the rest of the world. Jim Devine [EMAIL PROTECTED] http://liberalarts.lmu.edu/~jdevine
Re: Re: Re: Samir Amin: Not a Happy Ending
On Fri, 28 Apr 2000, M A Jones crossposted: Mark Milner, deputy financial editor The Guardian Thursday April 27, 2000 How low can the euro go? ... Today the currency slumped to fresh lows on the foreign exchanges despite a rise in interest rates by the ECB. This is known as a buying opportunity of historic proportions. Some future George Soros out there is going to make an unholy killing by snapping up EUR and dumping USD. Exchange rates bounce all over the place -- the yen was as low as 85 to the dollar in 1995, then zoomed to 142 to the dollar quite recently, now it's around 106 (long-term averages put the yen at 110 to the dollar). The euro could go as low as 80 to the dollar and as high as 130, but as long as the EU keeps running big trade and current account surpluses vis-a-vis the US, investing in its currency is a no-brainer. As someone said, somewhere, one should not mistake a data point for an inflection point. -- Dennis
Re: Re: Re: Re: Samir Amin: Not a Happy Ending
Mark Jones http://www.egroups.com/group/CrashList Dennis R Redmond wrote: This is known as a buying opportunity of historic proportions. Some future George Soros out there is going to make an unholy killing by snapping up EUR and dumping USD. Hey, Russia posted a whacking bal of payments surplus last year and has done almost every year since 1991. Is it also a no-brainer to buy up some roubles right now? Mark 'no-brain' Jones
Fw: Re: Re: Re: Samir Amin: Not a Happy Ending
- Original Message - From: "M A Jones" [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Friday, April 28, 2000 3:57 AM Subject: Re: [PEN-L:18398] Re: Re: Re: Samir Amin: "Not a Happy Ending" Hey, Russia posted a whacking bal of payments surplus last year and has done almost every year since 1991. Is it also a no-brainer to buy up some roubles right now? While I think about, the US has run a b of p deficit for at least two decades, so obviously we should have been piling into roubles since at least 1973, when one rouble was worth 1.7 US$ (unlike today when one dollar buys a kilo of dried roubles). The UK (which recently overhauled France in GDP, thus proving again the superiority of Anglo-Saxon methods) ran a deficit for most of the 19th century; no doubt the brainless thing then was to bale out of Nepalese rupees, Bahamian cowry shells etc and jeopardise your children's inheritance by buying sterling. Mark Jones http://www.egroups.com/group/CrashList
