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Of course, an interest rate cut will have at least a short term beneficial
effect on our equity markets. And, of course, the decision(s) to cut
interest rates were not influenced in the slightest by the proximity of
upcoming elections. Of course not :)
Nevertheless, my simple mind finds itself concerned that the Fed may simply
be postponing - and perhaps exacerbating - the inevitable. If I understand
Murphy's book on intermarket relationships correctly, then declining US
interest rates may ultimately pull the dollar down relative to the DMark,
Yen, and other currencies. If so, then foreign goods will become relatively
more expensive in the US. It seems to me that this would only make it even
more difficult for Japan and certain other countries to claw their way back
to economic health. And that's where the whole problem began!
The only hope then lies with a coordinated international rate cut, right?
But what's the odds that Germany and Japan will follow suit. The effect
interest rate in Japan is already something like 0.5%.
Maybe time to start accumulating Gold?
Clint
-----Original Message-----
From: Robert W Cummings <robertwc@xxxxxxxxxxxxxxxxxx>
To: Omega-list@xxxxxxxxxx <Omega-list@xxxxxxxxxx>
Date: Thursday, October 15, 1998 2:59 PM
Subject: Bear Trap
>
>This looks like a bear trap in the stock market but maybe just bloody Bob
>staying pessimistic.
>Maybe this is a sign of big time weakness in our economy from the feds
>point of view.
>
>
>Robert
>
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