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Steve
If you are Japanese or German and you have yen or marks invested in the S&P
and the dollar begins to decline, so does your investment. You wouldn't
want to throw a lot of money at China right now without shorting their
currency to offset the risk of devaluation. Plus, there are the things that
you mentioned. And there is the problem of if you have a really big
foreign-held national debt and your currency rolls over, who's gonna pay for
that?
Kent
-----Original Message-----
From: swp <swp@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>"Realtraders" <realtraders@xxxxxxxxxxxxxxx>
Date: Tuesday, June 06, 2000 8:51 AM
Subject: [RT] Bonds, dollar, stocks
Stock markets are far to small to move currencies. The flows from the
equity markets are tiny compared to fixed income, trade and fixed
investment. If there is a relationship between currencies and stock
markets, it is because they might be reflecting the same thing. Weaker
stocks are forecasting a weaker economy. A weaker economy may lead to
lower interest rates. Lower interest rates (relative to another country)
lead to a lower currency.
Steve Poser
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Steven W. Poser, President
Poser Global Market Strategies Inc.
url: http://www.poserglobal.com
email: swp@xxxxxxxxxxxxxxx
Tel: 201-995-0845
Fax: 201-995-0846
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