"Nebulous" <Nebulous@pigtail.freeserve.co.uk> wrote in message
news:41a8e4b3$0$19154$cc9e4d1f@news-text.dial.pipex.com...
>
> "MacHamish" <russj41@concentric.net> wrote in message
> news:u4fhq0ddcl6djfvbqocv5a68fcj2obabs8@4ax.com...
> > On Sat, 27 Nov 2004 17:30:36 -0000, "Nebulous"
> > <Nebulous@pigtail.freeserve.co.uk> wrote:
> > >Actually he should have bought Euro's.

The fact that he did not places a shadow on his genusness. Hindsight is
always easy.

> >
> > Yes, when it indexed in the 80's vs. the 130's, but even at that, it
> hasn't
> > outperformed gold over roughly the same time frame.  I'd much rather
> > speculate on gold than the vagaries of an individual currency.  It
spreads
> > the risk.  It's also easier.

We have had three swings in gold in the past 40 years. In allcases, most
investors
do better in the market.
> >
> > >Either way each individuals flight from the dollar contributes to its
> > >problems. America has to increase interest rates and tighten its belt.
> >
At the cost of more jobs and an increase in the homeless.



> > I agree, and it's unfortunate at this juncture in terms of the global
> > economy.  We probably wouldn't be at this juncture were it not for the
> > "international cummunity" refusing to see the real threat.  It's a pity
we
> > aren't all on the same page where militant Islam is concerned.
> >
Militant Islam has been a threat for two decades. But it is not a financual
threat.


> You're not at this juncture because of the international community.  You
> have reached this point because your government has pumped massive amounts
> of liquidity into the market by reducing interest rates to prevent a
> downturn. It did this just after the dotcom burst and then again later on.
> One of the impacts of this has been rises in house prices and people
> remortgaging to buy consumer goods.

House prices have risen consistantly for about 40 years. Remorgaging is the
results of our tax laws, not any effect of interest rates.

Market liquidity is only affected on the short term by the feds. Lower rates
encourages borrowing. Someone will eat the horse that brought them here.

>
> Policy needed tightening at least a year ago to prevent a 'hard landing'
but
> that wasn't possible given the political situation. So rates stayed low to
> help until after the election and the hard landing now seems inevitable.

Wouldn't help much, one way or the other. Hard landing is comming, like
dotcom......

>
> Your arms budget and military commitments haven't helped the situation,
but
> it was there anyway without the recent jaunts.

National debt. Becomes a problem as interest rates rise......

Jim Stewart