Re[2]: Econ: Asia Crisis?

[Jeffrey Triganza <jeffrey.triganza@xxxxxxxxxx>]

     This is a very valid point, and can not be overlooked in light of what 
     happened to gold in relation to asian central banks middle to late 
     last year.
     
     The other problem is that if the ccy crisis continiues to carry on, 
     asian rates will have to be hiked to protect the ccy and then this 
     will see investors move out of low yeilding ccy"s (japan, us, germany) 
     and back into asian ccy"s. 
     
     This may even effect the USD/HKD peg, which would surely effect the 
     rest of the world.
     
     Investors always look at yeild before risk.
     
     This would then have a further knock-on effect to the more 
     industrialised countries...


______________________________ Reply Separator _________________________________
Subject: Re: Econ:  Asia Crisis?
Author:  TRaffertu@xxxxxxx at Sydney-Internet
Date:    1/12/98 12:43 PM


In a message dated 98-01-11 20:14:59 EST, chamberlin@xxxxxxxxxxxxxx writes:
     
<< We will see very little reduction in revenues from asia because we don't 
sell anything over here anyway. >>
     
        Hi John,
     
         While that statement may or may not be true, I think it misses the
mark on the Asian crisis.  Seems to me the biggest potential problem lies in 
the truley huge amounts of US paper asian banks hold.  If siginificant amounts 
of this paper is liquidated, due to runs or bank failures it would have a long 
lasting downward effect on US markets.  I suspect that this would trigger a 
chain reaction of redemptions in IRA's, etc.  The potential is there for a 
prolonged downward spiral, i.e. 1929-1934.
     
          Hopefully, infusions of capital by the IMF and western banks will
provide the liquidity to avoid this process, or as a minimum allow the orderly 
redemption of US assets where necessary.
     
                                    Good luck and good trading,
                                             Ray Raffurty