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Some recent interesting news items on the German economy:
1. German plant & equipment orders in July were 7% above
7/96. June orders were up 16% year over year.
2. Exports surged 23.3% in June resulting in a surplus of
13.4 billion marks.
3. Preliminary seasonally adj consumer prices were up .3% in
August vs July and 2% year over year. The German Chambers
of Commerce said the Bundesbank must be "on the alert"
following this rise in consumer inflation.
4.German industrial output was surprisingly strong in June
due largely to stronger than expected manufacturing growth.
5.Business sentiment rose strongly in July, the fourth
consecutive monthly increase, according to the Ifo Research
Institute.
Just a few of the news items in Investors Business Daily
since 8/20. Doesn't sound like they are doing so bad over
there.
As far as I can see Germany & Japan are giving US companies
fits from very competitive prices due to the rise in the $.
Look at the problems Kodak is having. In addition corporate
profits will suffer from conversion of their foreign profits
into $'s. How long will US industry tolerate these problems
before the message gets to Rubin. How long will labor
refrain from pressing the White House for the transfer of
jobs overseas? Answers to these questions will have a
profound effect on our markets in the near future. Even if
you don't trade currencies you should watch them carefully.
There is money to be made here. I made a nice profit
on the yen in a very short time in May. Gave part of it
back recently when I took a small position too early.
But I think the current exchange rates are unsustainable.
Bob Doeden
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Simianer wrote:
> Hi Mark and all,
>
> > I've also heard it said that Germany is trying to raise
> rates (can
> > anyone confirm this?).
>
> This seems to be a rumor due to the very strong $ during
> the last weeks.
> The German Bundesbank declared to be happy with the
> DM/$-relation when the $ was at DM 1,70.
> Presently it is about DM 1,80 and so some guys expect the
> Bundesbank to raise rates to give
> some support to the DM.
>
> But: German economy is still weaker than expected (except
> export industries), inflation is
> very low. But the most important point: Unemployment rate
> of nearly 11.5%. So I think, it
> would be very hard for the Bundesbank to justify a raise
> of rates in a moderate economic
> scenario facing millions of unemployed people.
>
> I donīt believe in a raise during the next week - but I
> donīt know, if the Bundesbank is
> interested in my believes! ;-)
>
> Greetings from Germany
>
> Thomas
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