Forum Archive Index - February 2004

[robin benson <rob@hammerheadmedia.co.uk>]

Hi Allan

Regarding the level of the dollar against a basket of currencies (yen, 
NZ$, A$, euro, sterling, etc.), then, are you expecting a rise or 
decline in the dollar? This surely will have an impact on any A$/NZ$ 
investments you hold.

Personally, I expect the dollar has still to find it's lowest point, 
which I expect will be around your presidential election. I am assuming 
a Bush defeat, but as I'm sure you'll agree, this is by no means clear.

Regards

Robin

On 14 Feb 2004, at 19:37, Allan Potts wrote:

> Unfortunately, the word "trend" should have been replaced with 
> "avalanche" or alternatively "tidal wave".
>
> Sadly, it is my forecast that within the next 18 months the rate of 
> foreclosures in the U.S. will reach those ominous descriptions.
>
> It doesn't take a degree in economics from Harvard to figure this out. 
>  Sadly, too many Americans are drowning in debt, yet continue to 
> borrow on the equity in their residences, run up credit card debt and 
> buy new cars.  When interest rates start to rise, and they will, as we 
> say here -- "Katy bar the door".
>
> It will take about four to five months after the second rate hike to 
> put a large percentage of the population in the bankruptcy courts.  
> Many people now have 0% interest rates on their maxed out credit 
> cards.  When the "free ride" period is over the rates go to 7.5% to 
> the most credit worthy people (who normally do not max out their 
> credit cards anyway) to more like 12.99% up to 22 to 23% for the least 
> credit worthy that still can get credit cards.  Add to these rates 1 
> to 3% and variable mortgage rates increasing at the same time and you 
> can see what is going to happen.
>
> To make matters worse, the overinflated price of real property will be 
> plummeting and many many people will find themselves with a mortgage 
> far greater than the value of their property.  As Yogi would say "Deja 
> vu all over again".
>
> On that cheerful note, I'll bid all -- a good balance of the weekend.


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