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----- Original Message -----
From: "James Taylor" <jptaylor@xxxxxxxxxxxxxxx>
Subject: [RT] Re: US Govt. Manipulation of Stock Market
> Just yesterday the US Government bought $10 Billion worth of 30 year
T-Bonds
> for the Japanese Govt to offset the Japanese Govt's purchase of US Dollars
> the day before when they intervened to stave off another round of Yen
> strengthening. There are examples practically every month, and they are
> widely reported in the press.
Yes, intervention in the currency market, not the stock market.
> At some point the news agencies will report
> that the US Govt has been buyng stock to support this market and to try to
> stave off the inevitable panic. Think about it, if a government is quick
> to support its currency, wouldn't they be just as quick to manipulate its
> stock market ?
Sure, but there's one little problem- they don't have the legal authority to
do so. If they were, it would be the financial story of the decade, and
some reporter would find the evidence to prove it. I'm still waiting for
the proof. Please let us all know when "at some point" arrives...
> since the economy is tied to equity prices. It is sick how
> far this administration has painted itself and the lemming star gazing
paper
> chasing citizens into a corner.
What is your evidence of this? The market fell more than 20% in the fall of
'98, yet the economy grew at an annualized rate of more than 6% in the 4th
quarter that year. Looks to me like stock prices are tied to the economy
(how profound...), not the other way around. You're entitled to your own
opinion James, but you might want to humor us by backing up some of your
assertions with proof every now and then.
>
> Here we have a country, Japan, in a deep recession after having its market
> bubble burst 10 YEARS earlier, and their government pumping HUNDREDS of
> billions of dollars for years to try to stimulate their economy (to no
> avail), and the currency traders feel that their currency should
strengthen
> against the US Dollar. I agree that is most certainly should, given the
> absolute insane levels of trade deficits this government has allowed to
> amass, and the staggering levels of debt it in under. At some point, the
> market will prove to be bigger than they are.
>
Actually, in this case the market never will. It is all but impossible for
a country to prop up the value of its currency in the long run, because they
eventually run out of foreign reserves to use to do so. It is very easy for
a country to depress the value of its currency ad infinitum (I hope I just
used that term correctly...). How? By simply printing more money. The Yen
will not go up in value until the BoJ decides that it wants it to. Only a
shortage of paper and ink could stop them.
Bruce
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