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If there is a move to non-US assets, it would be a mistake to look for
direct offsetting investments in similar asset classes. In other words,
you don't sell US equities and immediately buy European equities; you
hold cash, probably in Eurocurrencies. Therefore European stock markets
would not go up. Instead, I would look for a fall in the dollar as US
assets are sold (and we are seeing that) and a drop in euro money market
rates (I don't know if that is happening, but I note that the ECB has
not lowered rates, perhaps feeling there is no need as cash comes in).
Japan's problems are so great, I don't think you can expect a normal
response there.
Regards
DanG
Ralph Volpe wrote:
>
> There is something here that sounds a bit fishy. I don't know about the European
> markets but the Japanese market is worse shape than the American markets. Also,
> America's interests rates are still higher, which attracts funds from around the
> world. If any money is being siphoned off, it's to other investment selections,
> such as gold and gold stocks. Keep in mind that lowered interests rates are a
> negative for those who invest in CDs or bonds, which at some point neutralizes
> the fear of the market and becomes investment capital directed into the
> securities markets. SLAWEKP's story below may be a situation of "selling the
> bottom" and then "buying the top" a few months later. It's hard to assess world
> money flow and investment directions. For example, if many investors were
> withdrawing funds from American markets to reinvest in their local ones, then
> why aren't those local markets going up? The truth is, anytime there's been
> world uncertainty it was always best to invest in American securities as a means
> of protecting assets. Am I missing something?
>
> --
> Ralph => E-mail => rjv@xxxxxxxxxx
>
> SLAWEKP@xxxxxxx wrote:
>
> > Just talk to my European Uncle that even against my advise he put money into
> > America on advise of his European broker which he sold him same story; new
> > technology, new era, people making killing in USA
> > your cash is trash. Now he uses words I cannot even translate in fear of
> > being kick out of this group. He lost on promisees of csco's, JNPR's
> > & others. In addition to loses he lost 10% in currency exchange due to $
> > decline. He is selling everything in US & taking home what's left.
> > Now multiply by millions of foreigners that have same situations. They vote
> > with their feet & money
> >
> > slawek
>
>
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