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There is a big difference between war with Iraq and war with North Korea
-- the reaction of Asian investors. If you had liquid capital in Japan,
South Korea, China, Taiwan, Hong Kong, etc., would you leave it around
to possibly get 'Goldfingered', or would you move across the ocean?...
Regards
DanG
M. Simms wrote:> To the extent the war is long and costly, then YES.
> If the quick-war scenario does not pan-out, then expect government borrowing
> to increase significantly and eventually crowd-out corporate
> borrowing....setting the stage for higher interest rates and lower growth
> rates.
> Only "fix" for this would be massive monetization i.e. money-creation
> policies.....resulting in massive inflation.
> Massive inflation also means higher interest rates...
> Thus, at some point in time, the government must decide between high
> interest rates and low growth or extremely high interest rates and nice
> growth.
> Right now interest rates are low because of low demand for money.
>
>
>>-----Original Message-----
>>From: Steve Walker [mailto:steve@xxxxxxxxxxxxxxx]
>>Sent: Thursday, January 09, 2003 2:26 PM
>>To: Realtraders@xxxxxxxxxxxxxxx
>>Subject: [RT] Long term interest rates
>>
>>
>>If there is a "war" with Iraq or N. Korea, should we expect the long
>>term interest rates to rise? If so, this would make the yield curve
>>more steep.
>>So, perhaps after an initial decline could stocks be expected to move
>>up as they did in the earlier confrontation with Iraq?
>>
>>
>>
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