> Henry C.K. Liu wrote:
>
> >In the short term, the dollar will rise for maybe another 2 weeks, but the
> rise will not extend into April.
Till the end of March, the dollar will be driven by the Japanese fiscal year which ends March 31. The Jpanese banks have to recapitalize before the end of March. The only place they can get funds is to dump or not buy as much US Treasurys and push US interest rates up which normally will push up the dollar in the short term before the impaxt of high rates hits the equity market. Also Rubin/Greenspan are fully prepared for the Japanese, and have strategy to foil Tokyo's moves to push down the yen. Typically, Rubin/Greenspan strategies last only weeks because they don,t believe ideologically to foll around with market force in the long run. Also, Asia continues to slide down hill.
>
> >For the medium term, in the next 12 months, the dollar will fall by perhaps
> 10%.
This is obvious, the dollar has no place to go but down, particulary when the DJIA crashes within the next 12 months. Ironically, when the Dow falls, it will cushon the fall of the dollar, because US assets will become cheaper.
> >For the long term, 3 years, the dollar will be down 20-30%.
> >
This is a no brainer. All the forces are indicating an overvalued dollar: the trade deficit, unsustainable high real interest rates, plus a partial recovery of Asia which will push the dollar back to more normal range. It depends, of course who replaces Greenspan. I must admit, the euro is a wild card for lack of historical data.
>
> >My own money is behind this view and I can be wrong (hope not.)
>
> Why do you think this, Henry?
>
> Doug
If I should be wrong, can I get a job with LBO? Actually, I am fully hedged.
Henry