From: "Phil Payne" 

"Don Hills"  wrote in message
news:qHfVEtgaXerE092yn{at}attglobal.net...
> In article ,
> "Phil Payne"  wrote:
> >A "solid economy"?  No - a true basket case economy.  An inflating
bubble.
>
> Well, of course. There's an increasing feeling that it's too good to last,
> so everyone is coining it while they can and hoping they won't be the ones
> to be caught with their pants down.

It's just that so many factors are maturing together.  Not least the
fifteen consecutive hikes in Federal interest rates.  Sooner or later you
have to get off the tiger's back, and the dollar minus this artificial
support is just paper money.

The US deficit is well over 50% funded by foreign purchases of Treasury
bills - but that process has a nasty habit of stopping abruptly when both
the apparent yield becomes unattractive _and_ at the same time the likely
conversion rate on maturity drops.  The Treasury has been compensating for
the maturity conversion rate problem by hiking the yield, but this is by
definition unsustainable.

There's considerable speculation this weekend that the Reserve will pass on
one increase just to see what will happen.  I look forward to the results -
IMO a dangerous experiment but what choice do they have?

Story today: "US Dollar Annihilated":

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/US_Dollar_Annihil
ated_1146481588272.html

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