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-----Original Message-----
From: CHRIS KAPPNER <CHRIS.KAPPNER@xxxxxxxxxx>
> This is in response to request about information regarding the Federal
> Reserve system. The FED is a PRIVATE ORGANIZATION and has no >
official relationship with the US Federal Government.
>
> I am reading a book by G. Edward Griffin, "The Creature from Jekyll
> Island <SNIP>
And how does this wonderful book explain the fact that the chairman of the
Federal Reserve is appointed by the President and approved by the Congress?
Chris, put the book down for a second and ask yourself does this honestly
sound like an organization with "no official relationship with the US
Federal Government?" I just heard on CNBC that Greenspan will be
testifying before Congress on 1/20. Is this the standard practice of CEOs
from private companies?
Now, in an attempt to turn this discussion back towards what this list was
meant for, here's some info regarding international finance that all traders
might want to consider. The Dow had a great day today, but it has still
trailed the S&P and the Nasdaq for some time now. The reasoning from the
so-called experts has been that the Dow is comprised of large multinational
corporations which were hurt much more seriously by the global economic
meltdown. I'm sure there is some truth to this, but these same people are
predicting a bad 1st and 2nd quarter for these same companies, and I think
they're dead wrong for two reasons.
First, over the past several months the value of the US dollar has fallen
significantly against the major foreign currencies with very little mention
of it in the press. The lower dollar helps US companies with large overseas
sales because the value of those sales is now greater in dollar terms. In
other words, even if their sales growth is flat, their profits will go up.
It takes time for this effect to work its way through the system, but I bet
it will be there when the 1st quarter numbers are calculated.
Second, the analysts following these stocks are soon going to realize that
the introduction of the Euro is extremely beneficial to the Dow stocks. The
theory behind the Euro is that by removing the risks and costs of currency
conversion, companies will expand and gain greater economies of scale across
Europe. However, many of the Dow companies are ALREADY doing business in
all of Europe (GM, GE, P&G, etc). For these firms, the Euro represents
almost an immediate reduction in business costs that will flow right to the
bottom line.
Look for the Dow to reach 12000 before the end of spring (of course, the
rest of the market will go along for the ride...).
Bruce
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