[lbo-talk] DD on the USD

John Mage jmage at panix.com
Wed May 21 15:19:40 PDT 2003


> The capital flows which finance the deficit, rather than the deficit

> itself, are the key to the currency move, and they come from euroland

> and Japan in the main (we Brits put up quite a bit but have never

> managed to escape being a dollar proxy in the past).

>

> dd

the deficit was financed post-bubble almost entirely with short term dollar corporate obligations (and a very little bit of treasuries). as these mature the responsibles are moving to euro (& loonie) obligations. especially now with Snow's backing off the strong dollar mantra. therefore the currency move. will this not of itself lower euro (& loonie) interest rates?

john mage



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