12.04.2003

Peter Brimelow quoting Wall Street Winners:

"The very indicator that suggest the rally isn't kosher is the beloved U.S. dollar. The most important of all currencies is in a tailspin against the euro and several other currencies in the US Dollar Index and had clearly violated 1998 lows, which were set in the Long-Term Capital Management crisis. ...the euro is the only vent through which the dollar can blow off steam. Most Asian currencies are managed as their respective central banks buy dollars to effectively keep them below market rates.

"[N]ot enough people appreciate the fact that such rapid falls put pressure on both stock and bond markets... The dollar in the last 12 months has fallen more than in the 12 months preceding the 1987 crash. We have no idea if this market is going to crash or not -- there are plenty of safeguards implemented after 1987 to prevent it from doing so -- but if it does, it's not like the warning signals weren't flashing."