Why are we not as afriad of potentially $1 trillion in toxic pape

Why are we not as afriad of potentially $1 trillion in toxic paper at German banks as we were on Tuesday?

Foreign Exchange Outlook : The US dollar exchange rate is not through rising, and we make that assertion on the grounds that the world is not through throwing unpleasant surprises at us. Why are we not as afriad of potentially $1 trillion in toxic paper at German banks as we were on Tuesday? Besides, various coutnries could actually intervene, if not this week, with the intent of driving their currencies down and "creating" inflation. We don't expect this outcome, at least not soon, but surely what they would be buying US dollars. And on the economics front, we concur with the Confederation of British Industry ,which said today it is stunned by the sheer speed with which things have fallen apart. The economic onsequences are deep and long-lasting. The analyst who said he expects recovery in Q1 is dreaming. In short, we haven’t hit bottom yet.

More Shocks are in store, and as we have seen, shocks favor the dollar.

At a guess, though, confirmation of Geithner and upcoming announcements of bailout/recovery plans, if accepted as worthy by the market, are ironically US dollar exchange rate negative. Still, the overall trend is in place and we do not see a reason to expect it to come to a halt.

Bye For Now

Barbara Rockefeller
Foreign Exchange Trading