From: Forrest Bishop (forrestb@ix.netcom.com)
Date: Wed May 29 2002 - 03:16:24 MDT
The past few weeks have been rather interesting, from many sides out there in global financial land. This chart:
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12
shows the 'miraculous' recovery after 9/11 and the expected wearing-off. The past week:
http://quotes.ino.com/chart/?s=NYBOT_DXY0
appears to resume the pre-9/11 trend. A more disorderly exit from dollar-denominated positions cannot be ruled out. Neither can
another round of dollar-supporting currency collapses in the nether reaches of the empire, like Japan and Australia.
"...The story is simple. The debt trap set for the emerging markets by 3% dollar interest rates in the early nineties, was sprung in
1997 by a joint effort of the Fed, the IMF and the BIS. The IMF demanded self destructive policies from the countries it was
supposed to help, the BIS raised their bank's reserve requirements (actually it was their net asset ratios - a.k.a. [capital]
adequacy - but few understand what that is and reserves are a close enough descriptor), and the Fed raised interest rates by all of
1/4% and the whole Asian economic system collapsed.
"This generated the requisite dollar demand, stopped Asian gold demand, produced an Asian gold supply, and allowed EU and US banks
to buy out many Asian corporation's assets that they were barred from owning before. Hyena and Vulture LP had their day. We were
spared disaster for another three years."
http://www.usagold.com/hall/hallfame2.html#anchor87655
Make that four years plus, it's really hard to time a market. We have a pretty strong set of confirmations that the bulk of US gold
reserves are either gone or encumbered, btw. It's been a great ride.
-- Forrest Bishop Chairman, Institute of Atomic-Scale Engineering www.iase.cc
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