In the next few days, three of the world's most important central bankers are due to make important statements about the world economy. They are all going to speak in terms of guarded optimism.
Don't believe any of it. They have no more idea than anybody else as to when the present recession is going to lift. They are really just crossing their fingers, hoping for the best. Instead, watch Koizumi tomorrow. If he's not brave enough he might pull the rug completely from under the central bankers. He's going to announce just what the Japanese government proposes to do about their bankrupt banks and how Japan is going to halt its continuing slide into deflation and depression. Foreign investors have already given up on Japan. There are only loyal Japanese investors left. Unless Koizumi's measures are positive enough, then this might be the trigger that will cause domestic investors to start buying dollars. Then we'll have the scenario I mentioned a day or two ago. The American dollar will rise and the country's already large deficit will increase, its exports will be reduced, producing more unemployment, China will get upset about the cheaper Japanese exports driving out its own, the exchange rates will become erratic, and so on and so on. Not comfortable at all for any of us. And there won't be a damn thing that any of the central bankers can do about it. Millions of players all round the world will decide what the fate of our national currencies will be. Watch the price of gold then! Then perhaps the central bankers will get wise. Keith Hudson __________________________________________________________ �Writers used to write because they had something to say; now they write in order to discover if they have something to say.� John D. Barrow _________________________________________________ Keith Hudson, Bath, England; e-mail: [EMAIL PROTECTED] _________________________________________________
