Canada Kicks Ass
Something which was incorrect about this Canada Kicks Ass pa


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Johnnybgoodaaaaa @ Mon Jan 19, 2004 11:47 am

Need a surplus to keep things functioning.


nonrev @ Mon Jan 19, 2004 11:48 am

Fucntioned? Well, the chickens are coming home to roost now.... Are you aware that you dollar is falling against ALL major world currncies this year? Its in the order of nearly a 20% drop against the Candian dollar, for instance.
What that mean is that world investors dont want US dollars, anymore and are afraid they will be worth less and less,m the longer they keep them.
This will mean everything you import is costing more and more.


Johnnybgoodaaaaa @ Mon Jan 19, 2004 11:51 am

Last week the Euro started falling and the US dollar was gaining on it. Also the stock market has been getting stronger. The US is just coming out of a recession, so it's not like the debt and everything has been causing the dollar to fall. The debt has been around for years, yet the economy and the dollar has strengthened, so the debt really doesn't have much to do with the dollar when you think about it.


nonrev @ Mon Jan 19, 2004 11:51 am

Thats a nice c&p, son - do you understand it?


Johnnybgoodaaaaa @ Mon Jan 19, 2004 11:53 am

I wouldn't copy and paste it if I didn't.


Johnnybgoodaaaaa @ Mon Jan 19, 2004 11:54 am

That the US has been in a recession since the sept. 11th attacks and a little before them? The US economy is now showing growth again, and last week the dollar started to show signs of growing on the Euro.


nonrev @ Mon Jan 19, 2004 11:54 am

The dollar has NOT strengthed, my friend - where the Hell did you read that?


Johnnybgoodaaaaa @ Mon Jan 19, 2004 11:55 am

The dollar enjoyed its best day in five months on Friday as the euro slid after data showed a massive jump in net capital inflows into the US in November.

A capital report from the US Treasury eased investor fears that two months of below-par inflows were undermining the dollar's value, opening the way for much lower levels before any correction.

But currency strategists are wondering why the dollar fell in November if investors were buying it in such quantities.

November saw a net $87.6bn of inflows, nearly enough to fund the monthly current account deficit twice over. The inflow was the largest since June and represented a steep improvement on October's $27.7bn inflow and September's tiny $4.3bn. The current account, the widest measure of investment and trade flows, is made up of the trade balance, capital flows and foreign direct investment. The US trade deficit, running at record levels, means capital flows into the US need to amount to about $45bn a month to fund the deficit.

Moreover, the quality of the inflows in November was good, in that it reflected renewed interest from a broad base of private investors. Overseas investors bought a net $33.5bn of US Treasuries, up from $12bn in October. They bought a net $29.7bn of US corporate bonds (from $20.9bn) and a net $8.8bn (from $1.2bn) of equities, having been net sellers in five of the previous 12 months.

The low yields on offer in the US, together with greater interest in equities outside the US, had led economists to fear independent investment inflows would weaken and leave the dollar's value hostage to the whims of foreign central banks. Asian central banks spent unprecedented amounts intervening last year to weaken their own currencies, buying US assets in the process, mainly bonds.

The report was viewed as a boost to continuing investor confidence in US securities, and the euro slid to $1.235 from $1.26 early on Friday.

"[The] data could not have been a better validation of the Fed's relaxed rhetoric in the face of the declining dollar and trade gap," said Ashraf Laidi, chief currency analyst at MG Financial.

But how did the dollar fall by more than 3 per cent against the euro and slide against other currencies if investor demand for dollar-denominated assets had increased so sharply?

The first suggestion is that the dollar's fall was related to speculative selling. After bottoming just below $1.14 early in the month, the euro rose steadily to $1.20 by December. Speculative positions shorting the dollar against the euro were very large during the month, but there is little evidence of a massive build-up in the data available.

Foreign direct investment from the US might also explain the dollar's slide, if US companies had massively increased their overseas investments. But that too is unlikely, given that total FDI outflows in the third quarter, although much stronger than in the second quarter, totalled just $27.4bn.

Simon Derrick, senior currency strategist at Bank of New York, believes investor hedging provides the key. Bond investors are more likely to hedge their currency exposure than equity investors, where volatile stock moves make a hedging strategy less worthwhile.

Mr Derrick suggested overseas investors were funding their investments via the swaps market and not buying the dollar outright.

"Until investors are prepared to hold US assets on an unhedged basis, then it is difficult to build a compelling case for a sustained turnround in the greenback's fortunes," he said.


nonrev @ Mon Jan 19, 2004 11:57 am

Not arrogant - just thought you were trying to impress me. I'm a hard bastard to impress.


Johnnybgoodaaaaa @ Mon Jan 19, 2004 11:58 am

The Euro slid last week, and the dollar got a little better.


nonrev @ Mon Jan 19, 2004 12:01 pm

Thats one or two days.... had someone I know from the States ( :wink: ) tried to pull that one on me a few weeks ago - he called it a "trend".
Until I got him to go back a year or two, and see where it came from.
Trends are comprised of more than a few days.

Theres an old Bob Dylan line: "been down so long, it looks like up to me."

If you cant understand that you cant continue to spend more than you make, then youre in for a great deal of hurt.


Johnnybgoodaaaaa @ Mon Jan 19, 2004 12:06 pm

Not a trend yet, but just have to wait and see. Sure it's gone down quite a qays that even a slight increase looks positive, but since the money has gone down our exports are cheaper. People buy our exports cause they are cheaper now, thus building our economy up more. It's not like the US dollar has been going down for years now and it's some sign of the falling of the US. I think the US dollar will start to strengthen more as the economy grows more.


Johnnybgoodaaaaa @ Mon Jan 19, 2004 12:10 pm

All you people act like this is the first time the US has had problems. I seem to remember the 70's not being that good of a time for the US. I also remember the great depression wasn't that good of a time either.


nonrev @ Mon Jan 19, 2004 12:17 pm

"People buy our exports cause they are cheaper now,"

that is true.

Unfortunately, the United States is a net IMporter - hugely.

So, you suffer more than you benefit.


nonrev @ Mon Jan 19, 2004 12:19 pm

Google something else: "Federal Balance of Trade Deficit"


And your own corporations are adding to the problem - by exporting what were US jobs to places like India, Vietnam, even Red China.

A lot of what you buy, and think is yours - ISNT.

example: you now cannot buy a single pair of Levi's, that have been made in the United States.

Thats sad.



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