OK I Fund Dogs Where Are You?

[nnuut]

Where are you I Fund Dogs. What you think about a bounce tomorrow? Might be over bought but the falling dollar might help.:%

[coolhand]

Woof!

nnuut,I do not see the dollar gaining any strength tomorrow. If Friday's trade report comes in like expected, that is an increase in the trade deficit, I expect the dollar will take another hit. I see no reason for the trade deficit to be good news. We are not an export country. But, foreign equities won't like that news either. They are dependent on our economy to keep the global market going.

Watch the foreign market tonight. I bet it drops like our domestics did today. I also expect our domestics to drop again tomorrow. Don't forget about oil. It's taking its toll on equities right now. Even a good inventory report didn't help (lower dollar is the reason).

If Friday's report comes in showing a widening trade balance...another sell-off could ensue. Question is, how far are we going to drop? FOMC looms on the horizon.

I will say this, the "I" fund is probably a better short term play than either "C" or "S" right now.

Just my thoughts. I'm not an economist (not that they're any help). :P

Good Luck!

[tsptalk]

coolhand wrote: If Friday's trade report comes in like expected, that is an increase in the trade deficit, I expect the dollar will take another hit. I see no reason for the trade deficit to be good news.
Might it be a case of buy the rumor, sell the news? Or in the case of the dollar, sell the rumor, buy the bad news? Maybe it will rally?

Just a contrarian point. I have no real opinion on it.

[Rolo]

Bounce, possibly. I'm not expecting anything as volatile as the C fund, though. Steady as she goes, upward, is the way I see it.

[Gritz]

I agree with the I trend continuing forward/up with an occassional draw back, and that's about as in-depth as I go for now, other than the recent word on the streetout of asia, particularly Japan is fairly good economically,in spite of pressures they are having with oil, as we are. Of course the Euros could put a drag on I. As for investors here, smart or otherwise, appears they may be dumping the dollar in favor of chasing the oil stocks/funds/commodities which would seem to account for the pressure on the dollar and then add on the trade deficit, ow!

Just got this off Reuters on Yahoo:

TOKYO (Reuters) - The dollar spun to a two-month low against the euro on Thursday, hit by comments from the Japanese prime minister that Japan's foreign reserves needed diversity. ....Traders said a range of factors have dented the dollar, including oil rising to near an all-time high and concerns about upcoming U.S. trade deficit data, though a prime mover was the attraction of currencies of countries with high interest rates.

[tennisguy]

Does anyone have any commentsaboutthe trade report? If it is bad news for the U.S does the I fund usually go up? Down?

Thanks Tennis Guy

[coolhand]

tsptalk wrote: coolhand wrote: If Friday's trade report comes in like expected, that is an increase in the trade deficit, I expect the dollar will take another hit. I see no reason for the trade deficit to be good news.
Might it be a case of buy the rumor, sell the news? Or in the case of the dollar, sell the rumor, buy the bad news? Maybe it will rally?

Just a contrarian point. I have no real opinion on it.
Of course, you could be right Tom. It may be a time to buy the rumor. The problem as I see it is that the jobs we seem to be manufacturing are service sector jobs. What are we exporting? China's still putting cheap goods on the street here. Plus, what if the report comes in lukewarm? Even so, it's tempting to put a little something in, especially if we're downtoday. It just seems like such a gamble though.

Dollar is tanking again. Asian equities are following our market down from yesterday. Euroland has not begun trading yet, but I suspect will also drop. Even if the trade balance looks good, the "I" fund may not be the place to be Friday. The dollar will probably bounce and offset any gains.

It's so mixed. The Fed keeps telling us the economy is moving along okay, but we have so many negatives weighing on the market. Maybe I'm a little too early with my expectation that the market is going to drop, but it's not as though my attitude toward the marketisn't justified.Iwant to get back in, I'm just having a hard time finding a reason to.

I do keep an eye on John's market timing models. He's all "G" right now too as are you and others. I happen to like my company right now ;).

[nnuut]

Don't know, Just don't know???? Think we will lose on the Trade numbers and may force the market further down, but that may be a chance to get in and catch the bounce? Rolo thinks the other direction "Bounce, possibly. I'm not expecting anything as volatile as the C fund, though. Steady as she goes, upward, is the way I see it." I'm in a wait and see mode for now.:*

[Rolo]

Speculating is healthy and a great way to learn about the market and economics. However, with so much uncertainty, I will go where the evidence leads...the observable, measurable, certain evidence. That evidence, so far, is that the I fund is in a very nice uptrend and I will stick with it until I see a clear indicator otherwise (i.e. it tanks on volume/tangible bad news ordollar clearly reverses trend).

The same goes for C only it isn't nearly as strong; if it doesn't resume the uptrend by Monday, I will move 100% I.

[neirbod]

I'm with Rolo, and playing the long-term uptrend. Playing the short term wiggles hasn't helped me. I expect there will be choppiness, but I believe the uptrend will continue over the next weeks and possibly months. If the dollar continues to weaken toward $1.45/euro, which many anticipate is likely, that alone could give me a 10% return this year even if the stocks themselves remain flat. I'll take that.

Until I see a definitive downturn, I will stick to my 100% I.

[TEUFEL HUNDEN]

I think that the I may fall a little and that could be a good op to buy in for people. I also think that over the next few weeks it will continue to gain strength. I will remain 100% I unless it drops below the 10 DMA.

US $ down .13% right now and EFV is down .28 EFA down .45 Not to bad. The oil issue will leave a scratch, but I think this fund will continue to gain.

[smedlap]

Stick with the plan - 100% I and enjoying the ride.

[tspgo_com]

smedlap wrote: Stick with the plan - 100% I and enjoying the ride.
I would be a little uneasy to be 100% invested in I. The I-Fund has been in a sustained uptrend for a while but it is showing signs of slowing down and possible reversal. It is slowly moving away from the upper trend line and approaching the base trendline. Watch the base trend line carefully. If It breaks it, trouble is ahead. I am expecting a sell signal any day now. (for sell signals see http://www.tspgo.com)



http://www.tspgo.com/images/ifund1111.gif
Happy trading,

TSPGO!

[coolhand]

smedlap wrote: Stick with the plan - 100% I and enjoying the ride.
I know you've been watching, but why haven't you been posting? I do better when I hear what you have to say. Your insight into the overseas markets helps. :^

[TEUFEL HUNDEN]

On Feb 25th you stated this:



tspgo_com wrote:

I am fully invested in I (40%), however I am not expecting great things right now. It is too close to the upper trend line. It does not seems to have enough energy in storage to keep making new highs.


and today you state this

tspgo_com wrote:

I would be a little uneasy to be 100% invested in I. The I-Fund has been in a sustained uptrend for a while but it is showing signs of slowing down and possible reversal. It is slowly moving away from the upper trend line and approaching the base trendline. Watch the base trend line carefully. If It breaks it, trouble is ahead.

This is nearly 2 weeks of gains for the I fund and has set a new high three times since the 25th. I have been noticing a trend of about 3-4 days of increase followed by a drop then back to the 3-4 days of increase.The I fund has droped to the lower trend line 3 times in the last30 days and has rebounded every time.

I will stay 100% I unless it drops below the 10 DMA

[cowboy]

TEUFEL HUNDEN wrote: On Feb 25th you stated this:



tspgo_com wrote:

I am fully invested in I (40%), however I am not expecting great things right now. It is too close to the upper trend line. It does not seems to have enough energy in storage to keep making new highs.


and today you state this

tspgo_com wrote:

I would be a little uneasy to be 100% invested in I. The I-Fund has been in a sustained uptrend for a while but it is showing signs of slowing down and possible reversal. It is slowly moving away from the upper trend line and approaching the base trendline. Watch the base trend line carefully. If It breaks it, trouble is ahead.

This is nearly 2 weeks of gains for the I fund and has set a new high three times since the 25th. I have been noticing a trend of about 3-4 days of increase followed by a drop then back to the 3-4 days of increase.The I fund has droped to the lower trend line 3 times in the last30 days and has rebounded every time.

I will stay 100% I unless it drops below the 10 DMAMarkets change quickly and what TSPGO said earlier can reverse the next day. I believe he is right in stating that were nearing a top. I have went 100% I today playing the 10 day DMA but soon this won't work either. Going to try to make up some of this weeks losses.

[nnuut]

Woof!

nnuut,I do not see the dollar gaining any strength tomorrow. If Friday's trade report comes in like expected, that is an increase in the trade deficit, I expect the dollar will take another hit. I see no reason for the trade deficit to be good news. We are not an export country. But, foreign equities won't like that news either. They are dependent on our economy to keep the global market going.

Watch the foreign market tonight. I bet it drops like our domestics did today. I also expect our domestics to drop again tomorrow. Don't forget about oil. It's taking its toll on equities right now. Even a good inventory report didn't help (lower dollar is the reason).

If Friday's report comes in showing a widening trade balance...another sell-off could ensue. Question is, how far are we going to drop? FOMC looms on the horizon.

I will say this, the "I" fund is probably a better short term play than either "C" or "S" right now.

Just my thoughts. I'm not an economist (not that they're any help). :P

Good Luck!
Well, looks like you called that one on the money Coolhand, good job!:^We'll see tomorrow.

[nnuut]

I 'm a TRUE "I Fund Dog" as of the COB today 100% I fund. Have reservations on the C and S due to GREAT possibility of the Trade numbers WIDENING. If the C and S drop more tomorrow it might be an opportunity.:%

[coolhand]

Dollar is a little firmer this evening ahead of the trade report. As goes the trade report so may follow the dollar. Report will be released 8:30 in the morning, an hour before the opening bell.

http://tinyurl.com/6aw3o

Futures marketis pretty flat.

[smedlap]

Coolhand, good morning. The dollar may firm in the short term but the truth of the matter is that the $ will weaken for a long time to come. Only those that travel to Europe see that as a problem. Now, we love our dollar. But our dollar does not know us. Dollar will weaken minimum 7% this CY which means an equal kicker to the I fund (an equal fund to the stong C and S). The historic charts of the funds reflect such over the past 2 years - equal strength and dollar weakness. We have a great economy and I see job growth during the next 2 month reports. I'm out to G Jun unless something dramatic occurs. Tom has called the market well according to historic charts / data. But it has been erratic because Warren has been played against the dollar, so the weak hands are not there. I just think the I fund and patience are the current and near future play. We areconsumers and remain such becauseour economy is in great shape! Appreciate your charts and your plays. I am sticking to a steady hand only because I do not see the steady growth waves experienced during Nov - Jan where one can jump back and forth. Right now, one can leave I fund for a seeminly better near-term C or S fund opportunity only to get hit by a surprice increase somewhere. Patience and lets see if we can get the 8% annual growth plus 7% kicker. I would be very happy with this come 31 Dec!!!



Nice morning - work!! Thanks Tom, I see you in G trying to give best advice - and you are!

[coolhand]

smedlap wrote: Coolhand, good morning. The dollar may firm in the short term but the truth of the matter is that the $ will weaken for a long time to come. Only those that travel to Europe see that as a problem. Now, we love our dollar. But our dollar does not know us. Dollar will weaken minimum 7% this CY which means an equal kicker to the I fund (an equal fund to the stong C and S). The historic charts of the funds reflect such over the past 2 years - equal strength and dollar weakness. We have a great economy and I see job growth during the next 2 month reports. I'm out to G Jun unless something dramatic occurs. Tom has called the market well according to historic charts / data. But it has been erratic because Warren has been played against the dollar, so the weak hands are not there. I just think the I fund and patience are the current and near future play. We areconsumers and remain such becauseour economy is in great shape! Appreciate your charts and your plays. I am sticking to a steady hand only because I do not see the steady growth waves experienced during Nov - Jan where one can jump back and forth. Right now, one can leave I fund for a seeminly better near-term C or S fund opportunity only to get hit by a surprice increase somewhere. Patience and lets see if we can get the 8% annual growth plus 7% kicker. I would be very happy with this come 31 Dec!!!



Nice morning - work!! Thanks Tom, I see you in G trying to give best advice - and you are!

As usual Smedlap, you offer great advice. Patience, that's something I have to work on. I'm getting there though. I'm still learning.

I agree with your assessment, I like the I fund too.

[Spaf]

As of 2:15 CT 11 March 2005

Over at www.barcharts.com (http://www.barcharts.com)EFA was a 96% buy. The stats looked good. Notice the MACD is even widening!

Attachment.

Rgds :) Spaf

[coolhand]

Spaf wrote: As of 2:15 CT 11 March 2005

Over at http://www.barcharts.comEFA was a 96% buy. The stats looked good. Notice the MACD is even widening!

Attachment.

Rgds :) Spaf
Hey Spaf, even I can understand that chart! I like it! :)

[coolhand]

Another reason to like the I fund.

http://tinyurl.com/6u6v2

[smedlap]

Coolhand and Spaf, Nice to see you both. You guys are hard at work and you will be the most informed as time passes. Interesting to see - I think we picked up a positive 0.5% even though the EFA refelected a slight loss. The other funds got hammered less G fund. I think we are in for a ride these next months. I have a difficult job so I am often not near the action. Nice to see you both active and Tom. Wonder what happened to Puerto Rico and Chaplain?? Nice weekend guys!

[coolhand]

smedlap wrote: Coolhand and Spaf, Nice to see you both. You guys are hard at work and you will be the most informed as time passes. Interesting to see - I think we picked up a positive 0.5% even though the EFA refelected a slight loss. The other funds got hammered less G fund. I think we are in for a ride these next months. I have a difficult job so I am often not near the action. Nice to see you both active and Tom. Wonder what happened to Puerto Rico and Chaplain?? Nice weekend guys!
Puerto Rico is lurking, but Chaplain left a month or so ago. Things got too negative for him I think. Shame. I reallyappreciated his insight.

See you next week smedlap. Check in as often as you can.

[puertorico]

I tHInk january let me with a bad sabor .
now I 'm scare hiding in G.waiting for
a sale :D

PR is lurking :D

[Spaf]

coolhand wrote: smedlap wrote: Coolhand and Spaf, Nice to see you both.
See you next week smedlap. Check in as often as you can.

Yah! Checkin smed! Will be at the hanger bar washing off all the whipsaws. Went over to the G-fund, where all the bulls were asleep and snoring. Wow! Left there and dropped about 15% in the I-fund to see if anything would bite! Trying to stay away from the red in US equities. Market kind of overcast and gloomy. Well the G-fund is warm and fuzzy at least!

Rgds!! :) Spaf

[TEUFEL HUNDEN]

tspgo_com wrote:

I would be a little uneasy to be 100% invested in I. The I-Fund has been in a sustained uptrend for a while but it is showing signs of slowing down and possible reversal. It is slowly moving away from the upper trend line and approaching the base trendline. Watch the base trend line carefully. If It breaks it, trouble is ahead. I am expecting a sell signal any day now.

It looks as if you hit this right on the money. The I is below the 10DMA and dropping. I had made an IFT to 100% G just prior to the deadline this morning. Now I'll Wait and see.

[Ragin Cajun]

.62 drop in the EAFE index on Tuesday???

This is confusing since the FTSE was up .5 and the Japanese market was barely down. Plus.........(from Marketwatch)

The euro briefly dipped below $1.33 for the first time in a week and was trading at $1.3308, down 0.4 percent.

Meanwhile, the dollar traded at 104.54 yen, down 0.4 percent, close to its value before the capital flow news

I'm waiting to see what the I fund did today, but am just a bit perplexed IF it goes down as much as .62. The numbers indicate a flat to slightly up day. What am I missing?

Oh well...any answers?

Rajun Cajun

[coolhand]

The I fund picked up a nickle today.The dollar is not going to rally to any great heights in the foreseeable future (IMHO). That's why I like this fund right now. That and at some point we'll get a bounce in equities. Still, anything can happen. Let's hope we have no more anthrax issues or anything else of that nature influencing the market.

[nnuut]

Yes, I am at the point of terminal confusion when it comes to the I fund? Down .62 today and makes 5 cents? Yesterday down .33 lost 14 cents? AmI wrong or just been dancing too much?:*I know the dollar gained today, but not that much! -$ -$ Not good! We will kill them tomorrow or roll further down the hill. Might have to join Tom in the "Good" fund.:!

[coolhand]

Well, I played this a little different. I started out40% I on Friday and then another 20% Monday on that down day. I'mslightly aheadright now. I still have another 40% in G that I can use to mitigate lossesor add to gains as this market is impossible to figure out day to day. I am starting to look at this market in a more intermediate view now. That is, play the trends andnot the wiggles. Tomgives great adviceand I certainly understand why he is still 100% G.

[GGal]

"European stock markets finished higher Tuesday. In London, the Financial Times-Stock Exchange 100 rose 24.60 points, or 0.49%, to 4,999.60.

Germany's DAX index gained 20.39 points, or 0.47%, moving to 4,387.69.

In Paris, the CAC 40 index rose 29.19 points, or 0.72%, to 4,077.74.

Asian markets finished lower Tuesday. Japan's Nikkei-225 index lossed 29.16 points, or 0.25%, to 11,821.09. In Hong Kong, the Hang Seng index fell 90.10 points, or 0.65%, to 13,816.75."

Does anyone know how this news relates to what happened with I today?

Gawga Peaches Are Sweeter!

GeorgiaGal

[nnuut]

No way Georgia Gal. Not me, can't you see? Must me the average of all modified by the fair value of the Dollar against the other currencies. Dollar up make more, Dollar down make less, lots less sometime, evidently. Someone explained this on the board the other day, but can't find the post.Who are YOU :#.

[neirbod]

nnuut wrote: Yes, I am at the point of terminal confusion when it comes to the I fund? Down .62 today and makes 5 cents? Yesterday down .33 lost 14 cents? AmI wrong or just been dancing too much?:*
I don't know why this happens, but it has been noted on this board before. Seems like there is sometimes a lag between the I fund and the EAFE quote. Over longer time frames they track well, but there can be some weird day to day discrepencies.

I just posted this in my account talk:

"...yesterday there was a big difference between the I fund and the EAFE. EAFE showed a loss of 0.62%, while the I fund gained 0.31%. That's nearly a 1% swing, and is not common. I have gone through the data as far back as I can, and see that such a big discrepancy is usually followed by a comepensatory discrepancy. That is, I expect the I fund to gain significantly less than the EAFE today, offering a good opportunity to buy back in. That being said, my charts show that 1) this is not true all the time, and 2) even when it happens, sometimes it takes 2 days."

I am betting that the I fund will do about 0.5 - 1.0% worse than the EAFE today to compensate for yesterday, and am using this as one reason to jump back to 100% I. My data are suggestive only, and I could easily get burned. But I am willing to take a shot. In any event, I still think I fund is a good bet medium term, barring any major downturn.

[clester]

Let me give you my mrthod for calculating the I fund.



First look at the currencies. (I use advfn.com under FOREX tab). The EURO has the most weight, pound and Yen. I avg them. So say the EURO is .7 green

Now look at the FTSE (UKX), say its -.7 red.

In this case it would avg out to 0.0.

now look at nikkei and other euro stocks. if they have a negative slant sau nikkei -.5 and euro stock about -.5 then I use a lighter weight for these nd my guess would be the I fund -.2 .

You just can't use the EFA. It's usually way off.

As of right now FTSE is -1.4% and the euro is +.8 so we're at -.6

Nikkei was up a little and yen is stronger so I would give maybe +.2 which makes us now at -.4. The rest of europe is down also, so take back the .2 and we're back at -.6

-.6 of 15.95 = -.10 CENTS ON THEI FUND.

IT SEEMS TO BE PRETTY CLOSE, BUT OF COURSE IT ONLY A WAG.

[neirbod]

clester wrote: Let me give you my mrthod for calculating the I fund...

Clester, I don't think this is correct. I ran a correlation betwenthe I fund and EAFE index for all available data (june 2003 to present). The correlation is 99.6% (see attached file). What this tells me is that the I fund and EAFE do track nearly perfectly over this time frame without considering any correction for currency values. If currency fluctuations were at play, I'd expect a poorer correlation. It looks to me like the EAFE and the I fund both account for currency values in the same manner.

Instead, I think what is happening is some kind of time lag, or pehaps other short-term adjustments that affect how the two match up over time scales of days. But over weeks or months, the two match up nearly perfectly.

Dave

[clester]

Just look how many time the EFA is off from what the I fund actually moves. Lots of time the EFA is +.5 and the I fund will be -0.5 cents. How can they be correlated? I'd say they're off 80% of the time. You have to use the actual EAFE fund price and you can't track that during the day. Its only posted once a day at about 7pm. (http://www.msci.com/equity/index2.html)

What I'm saying is that if you want to get a gage on the I fund during the day you have to something other than EFA ticker or any other ticker. They are not accurate on a daily basis. :cool:

[neirbod]

I agree that the EAFE quote is not accurate for day trading. But, over time, the fluctuations even out and the correlation is very high, so the EAFE is fine for assessing longer term trends.:^

[nnuut]

Thanks, clester/neirbod I hope that clears up things for GeorgiaGal. It''s kinda like a definate maybe --- you know what I mean?:*

[coolhand]

Using Safetyguy's method I come up with a two cent (.02) gain today. Let's see if that's how it gets posted later. See below:

G-Man wrote:

Good call on the I Fund price, Safetyguy. I've been trying to figure that one out for a long time. Mind sharing the magic formula?
Well, you have to look at the NAVs for Far East funds (MSCI Australia, MSCI Hong Kong, MSCI Japan, MSCI Malaysia, MSCI Singapore and MSCI Taiwan)and update them asof 10:00am PST for the current business day. All other fund NAVsget updated as of 8:30 pm PST. In other words, it is really magic (and it is the way they "I" fund prices are really calculated.)

Non-magician types (myself included) can get thisinfofrom the http://www.ishares.com (http://www.ishares.com/) website. Under the "Search by Category" box on the left side of the screen, select "International/Regional" > Global> MSCI EAFE Index Fund.

Once it comes up, select "Quotes and Charts" on the right side of the screen. (Sorry for the long instructions, it gives you a session ID each time and I can't copy a workable link directly to this chart.)

They seem to update the day's final price right after 4 PM ET and the percentage they show seems to be almost equivalent to the rise and fall of the I fund share price.

I picked up on this by going to the Barclay Global Investors website after reading on the TSP website, ..."Barclays Global Investors (BGI) reprices its EAFE Equity Index Fund, in which the TSP invests, after the close of the foreign markets. " The Barclays Global website takes you to the Ishares website. So today, it said the adjusted NAV (as of 4:05 PM) was down 0.06% which equated to a penny drop in share price.

There is also a disclaimer somewhere on the chart page that says "Performance charts on iShares funds will be available after fund trading begins" so maybe there is a way to track the "real" I fund performance on a 20 minute delay basis.

[coolhand]

So much for a two cent gain. The I fund ended up down a penny. Oh well. If it wasn't for the new high in oil, oil inventories and GM we might have had a better day. Course it was better than being in S or C.

[smedlap]

Hi Coolhand! When the S and C rebound, you will get your ride in the I fund. Out mid June to G, back to C mid October and into I fundJan for a bigger ride to Euro 1.7 to the dollar. That's the surehand, maybe written in sand! But we'll see. Nice to be essentially unharmed so far! Think Tom may soon lead the charge back into stocks from his G fund fortress. He's played US stocks well so far!

Historically this is the strongest week in the market until the first week of November.

The next two weeks are two of the worst of the year.

Dr Dome and Glome. - However it is much easier to make money in a down market then up :). I feel like I am in Die Hard III with the 18 trucks full of gold.

Love MSO - down 40% since Martha has left the pen.

[coolhand]

smedlap wrote: Hi Coolhand! When the S and C rebound, you will get your ride in the I fund. Out mid June to G, back to C mid October and into I fundJan for a bigger ride to Euro 1.7 to the dollar. That's the surehand, maybe written in sand! But we'll see. Nice to be essentially unharmed so far! Think Tom may soon lead the charge back into stocks from his G fund fortress. He's played US stocks well so far!
I don't doubt that smedlap. Pulled back today because the dollar is probably going to rally for a week or so. FOMC next week. Any gains will be muted by a rising dollar. C Fund may be the way to go in the near term. I did keep 20% in the I fund though. Oil may start taking a toll on this market if it doesn't decline soon.

Always have to listen to Tom. He's almost got me poised to start speaking in technical terms. Spaf too.

[Tpstew]

Hey coolhand I joined today but I forgot my password and login after returning from the desert a while back. Never got back into the message board thing. Anyway when I am out of stoks I like to sneak in and out of the I fund. Right now I am 50 G and 50 I (sorry Tom for not following you here latey haha). Yesterday when the market closed the I fund was up a hair. I check it here today and it says it was down a little as far as price per share goes. What gives? I also saw the gain in the G so it balanced out which is all I am looking for (at a minimum) when I am not in stocks. I guess my quetion is when does the I fund open and close.

[coolhand]

BigT wrote: I guess my quetion is when does the I fund open and close.
Ibelieve it closes at 4:00EST. There is a currency component to this fund that also affects its share price. Yesterday the dollar was down hard against the major currencies, but equities got hammered too, in effect just about canceling each other out. In this case the lower dollar didn't quite make up for the losses in equities.

BigT, what strategy do you use to play the I fund? Understand that I am an amatuer investor who is still learning how best to manage my tsp. My strategy is still evolving. Lots of good advice for consideration from many who post here.

What desert? I used to go 4-wheeling in socal around the cal/az border.

Good Luck! :)

[coolhand]

With respect to how the "I" fund share price is derived I have been doing some more investigation.

In figuring outthe "I" fund priceone must use the "NAV" value (what safetyguy has pointed out before). It appears to me that the EAFE value we track on yahoo and elsewhere does not include all aspects of the true price as reflected in the discrepancies that we see in share value vs how the EAFE tracked for any given day. It is not the "NAV" value.

Here is how the government explains it... http://www.sec.gov/answers/nav.htm

What this explaination does not answer is currency valuations and its effect on share prices. At least not directly.



NET ASSET VALUE
http://www.ishares.com/images/blank.gif

NAV
$163.29

Change
$-0.82

Change
-.50%


PRICE

Price
$163.70

Change
$-0.19

Change
-0.12%

http://tinyurl.com/5rasl[/b]

The "Price" columnshows one price and its associated change values. On the "NAV" columnwe seeits priceand associated change values. The "Price" valueis what is reflected in the EAFE as wetrack it through the day. I do not believe it reflects the currency component. The "NAV" valuetakes the currency values into account and provides us with the final sharevalue.

If you multiply the NAV above by the % change (-.50%) you get approx -.08 or an 8 cent drop in fund price, which is what was posted as share value yesterday.

I am still evaluating this process. As I get a little more familiar with it I'll post more info. Hope this helps.

[TEUFEL HUNDEN]

Coolhand, Thanks for the info on the I Fund. Do you have any speculations as to why it is falling and how long it will last? I know that the US $ is gaining, but there has got to be more.

About BigT and the desert, When military members refer to the desert they are talking about Iraq or Afganistan. No 4x4'n there unless you have a FAV (Fast Attack Vehicle) I think that is what he was talking about.

Keep the info comming on the I fund. You'll be the next resident expert:^

[coolhand]

TEUFEL HUNDEN wrote: Coolhand, Thanks for the info on the I Fund. Do you have any speculations as to why it is falling and how long it will last? I know that the US $ is gaining, but there has got to be more.In large measure it is falling because of the twin deficits. We are consuming more than we are producing. We are also flooding the market with dollars. This causes inflation if not controlled. If foreign currency was not buying our debt our interest rates would be much higher rightnow. As long as our debt continues to be funded by overseas buyers, it acts as support for our economy. This cannot go on forever. As we take on more and more debt we become more risky to bond investors. The bond market expects to be compensated for increased risk. But this leads us to aconundrum. Bonds have not risen in response to fed rate hikes. Instead they have fallen (up until the last couple of weeks or so).The last couple of daysthe dollar was gaining strength again because in my view it isanticipatinganother rate hike (next week). By raising the lending rate the fed acts to curb inflation, which acts to quell investor fears.So the dollar rises in response.But it much more complicated than this.Until mid-morning today,the dollar was gaining strenth big time. Thenthe Michigan Sentiment number came in low and oil has reversed course (gaining) whichput downward pressure on the dollar. These kind of issues, and others, act as drags on our economy and affect the dollar. This is really a pretty complicated process with considerable variables. I cannot speculate on how long it will last, but until we gain control of our debt I doubt the dollar will rise too far. Next weeks FOMC may help give us a little more idea on what may happen. I'll be watching.About BigT and the desert, When military members refer to the desert they are talking about Iraq or Afganistan. No 4x4'n there unless you have a FAV (Fast Attack Vehicle) I think that is what he was talking about.
Dooohhh! I knew that, I knew that. See what civilian life does to ya. :DKeep the info comming on the I fund. You'll be the next resident expert:^You bet!

Good post Cool - as all ways.

We actually have three problems.

(1) Current account deficiet (7T)

(2) Unfunded account deficiet (78T)

(3) Trade balance deficiet (666B)

The largest turd in the road is number #2 (like the pun there folks, come on I am trying here - #2-turd) - which is mainly medicare and medicade.

(3) We will never be able to correct because we can not export lawyers and personal trainers. We have no manufactoring base anymore.

Go get em! You need to get your USD changed to another currency like pronto - any currency at this point - not to be dome or gloom or anything :P. I presently have $10USD to my name - only for rememberance sake and I may want to buy a cup of coffee later on.

The US dollar (Symbol $USD in StockCharts.com) is looking very sad. Again please, tell me, why do foreign central banks want our Treasuries? Is there any hope that the dollar is finding any support in this range? I think not.


The 7 year chart of the US Dollar Index. Where is this all going to end? Why haven't the market reporters been telling us how good it is for the dollar index to go down? Isn't it still good for companies that export goods? Something is broke? And I think it's U.S.!
:shock:http://www.safehaven.com/images/miller/2754_f.jpg

[coolhand]

Hey Dr. D, good question. My response would be that foreign investors cannot afford to let the dollar slide too far so they buy treasuries to keep it propped up. If our economy sinks, so does theirs. It's a double-edged sword.

My concern is that foreign positioning isin progress to alleviate the negative impact of letting the dollar fall. It is not something a given country can react to without preparation. That's why China is not yet willing to unlink their currency from us. It would have too much of a negative effect on their economy. What happens when the rest of the world no longer needs the dollar? :shock:

It is a balancing act.

March 16, 2005

Lyndon LaRouche announced on March 9, based on a breaking pattern of developments, that, in his judgment, the world is now on the verge of a collapse of the entire dollar-based post-Bretton Woods floating-exchange-rate system. This does not guarantee the immediate crash of the dollar, and the evaporation of the entire global financial superstructure. It does mean that governments around the world, particularly the United States government, must be prepared to act, to avert an otherwise inescapable crisis at some point in the very near future.

It also means, LaRouche warned, that some circles in the financial oligarchy, typified by hard-core Anglo-Dutch operatives like George P. Shultz and Federal Reserve Chairman Alan Greenspan, will be tempted to move for immediate Schachtian austerity measures, and war provocations, as a means of blocking so much as a serious discussion about what former President Bill Clinton referred to as a "new global financial architecture," replacing the broken-down and hopelessly bankrupt current system. Since January 1997, LaRouche has been demanding the convening of a New Bretton Woods Conference, to restore the fixed-exchange-rate system, following an orderly bankruptcy reorganization of the global financial system. This, LaRouche argues, is the precondition for the massive emission of government credits required for long-term infrastructure projects, such as his Eurasian Land-Bridge.

As LaRouche emphasized in the foreword to a soon-to-be-released book, The Earth's Next Fifty Years, the collapse of the dollar system is not something that is about to happen. It is already under way. Metaphorically, the gasoline has already saturated the floor. We are merely awaiting the spark, which could come in any one of a number of forms. Events of early March, in LaRouche's estimation, signalled a density of such potential sparks.

In response, LaRouche warned, governments in the Americas and Eurasia must be prepared to abandon the false axiomatic assumptions that have plagued policymakers for the past 30 years or more—since the abandonment (by Shultz and President Nixon in 1971) of Franklin Roosevelt's Bretton Woods System of fixed exchange rates, pegged to a monetized value of gold. Until and unless the axioms of what is euphemistically called "globalization" are abandoned, the prospects of averting a plunge into a multi-generational new dark age are bleak.

The Warning Signs

Since the late January 2005 convening of the Davos, Switzerland World Economic Forum, a growing number of leading financial analysts and financial periodicals have abandoned the "see no evil" policy of ignoring the warning signs of a global financial meltdown, and have begun openly discussing a systemic collapse. Prominent figures like Stephen Roach, the chief economist of Morgan Stanley, pilloried Federal Reserve Chairman Greenspan in public at Davos, accusing him of presiding over the biggest mortgage and consumer credit bubble ever. A week after Davos, former U.S. Treasury Secretary Robert Rubin, at a London forum preceding the Group of Eight meeting of finance ministers and central bankers, directly took on Greenspan for lying about the magnitude of the dollar crisis, when he (Greenspan) claimed that the United States could continue to sustain massive current account deficits and Federal budget deficits. In meetings with Senate Democrats the day before his confrontation with Greenspan, Rubin had warned that the Bush Administration's campaign to loot the Social Security Trust Fund for "private accounts" managed by big Wall Street brokerage houses, was driven by the fear of a financial meltdown, perhaps caused by a drying up of foreign investment flows into the United States.
There was some dispute among academic economists at Davos about the amount of net foreign inflows into the U.S. bond and equity market per day that are required to avert a crash of the dollar. The bottom line figure is $2.5 billion per day, but some economists, like C. Fred Bergsten, say the figure is really now at nearly $5 billion a day.

Hence, there was panic on Wall Street when officials of the South Korean government in early March hinted that they were considering diversifying their foreign currency holdings. On March 10, the alarm bells rang again, when Japanese Prime Minister Koizumi made similar statements about Japan's plans to diversify. The dollar immediately fell to a two-month low against the euro, until Japan's Finance Minister Tanigaki stepped in to assure panicked investors that Japan would not take any precipitous measures, "because the impact would be big."

Mega-speculator Warren Buffett, of Berkshire Hathaway, released his annual shareholders letter in early March, revealing that his firm had posted significant fourth quarter profits by short-selling the dollar, and investing heavily in foreign currencies.

It's The Real Economy, Stupid

But the real heart of the collapse threat lies elsewhere: The U.S. economy, once the greatest agro-industrial economy in the world, has disintegrated; and the role of the dollar as the world's reserve currency has been decimated by that fact. Now, as LaRouche emphasized, we are facing an imminent bankruptcy of General Motors, one of the most formidable of the former American industrial giants. On March 10, the London Financial Times warned that international bond markets may not be able to cushion the shock of an anticipated downgrading of GM's debt to junk-bond status. The likely trigger for such a move by rating agencies is the anticipated bankruptcy filing of Delphi, GM's parts supplier, which was spun out of General Motors several years ago, as a means of driving down wages, and generating new inflows of cash. "The edge of the cliff appears to be drawing closer," the Financial Times reported. "If GM loses its investment grade rating, some holders of its bonds will be forced to sell them—and it is the extent of any market upheaval this could cause, that has been unnerving many." The Swiss daily Neue Z? Zeitung added, the same day, that GM will have between $45-50 billion in debt to refinance between now and the end of 2006, and "it is unlikely that the junk-bond market could absorb such a large issuer."

Adding to the picture of the physical economic breakdown of the United States, the American Society of Civil Engineers, on March 9, released their 2005 "Report Card for America's Infrastructure." The report found, not surprisingly, that the entire hard infrastructure of the country is in a state of disintegration, requiring trillions of dollars in investment. ASCE President William Henry told a Washington, D.C. press conference that the "time has come to call for the creation of a long-term infrastructure agenda for our nation," warning, "our infrastructure is sliding towards failure."

[b]Raw Material Costs Soar

Another major sign of a world economy gone haywire is the soaring costs of strategic raw materials, fuelled by a merger frenzy among commodity cartels, and a mad grab for control over the planet's raw material wealth, in anticipation of a dollar meltdown.

On March 9, the price per barrel of crude oil rose above $55, nearly matching the all-time high of seven months ago. The same day, the Energy Information Administration issued a forecast that gasoline prices at the pump would continue to skyrocket, projecting a $2.15 per gallon price for regular gas by the Summer.

Overall commodity inflation, particularly of key industrial metals like iron ore, skyrocketed. According to the March 10 Wall Street Journal, iron ore prices went up in mid-February by 71.5%. This was largely due to price gouging by the three iron ore mining cartels that control 75% of the world supply: Brazil's CVRD, Rio Tinto Zinc PLC, and BHP Billiton, Ltd.

Housing Bubble About to Blow?

Adding to the picture LaRouche developed is the sudden boost in long-term interest rates. During the first week in March, when the U.S. Treasury Department auctioned off ten-year Treasury bonds, which set the nation's mortgage rates, there were so few buyers that yields shot up to 4.42%, a seven-month high. A senior City of London investor, commenting on the jump in long-term Treasury yields in a March 10 discussion with EIR, warned, "If bond yields go up much higher in the U.S., things could get very nasty soon." He asked, "Is there any more capacity to take on this level of borrowing? I think not, and it will break probably sooner, rather than later." Disturbances in the ten-year bond market, he noted, directly impact on home mortgage rates; and most Americans have used their ballooning property values to sink deeper into consumer debt. "When this breaks," the source concluded, "it will get very nasty, and not too long from now." The Bush Administration is continuing blissfully ignorant of this looming "perfect storm." And that is yet another dimension of the problem.

Trade figures continue to show the depth of US deficits, which stand at 6% of GDP. The dollar is falling in value. Warren Buffett, regarded as the greatest investor in history sees this as inevitable:
"The dollar cannot avoid further declines against other major currencies unless the US trade and current account deficits improve. I think, over time, unless we have a major change in trade policies, I don't see how the dollar avoids going down. I don't know when it happens. I don't have any idea whether it will be this month, this year, or next year, but we are force-feeding dollars on to the rest of the world at the rate of close to a couple billion dollars a day, and that's going to weigh on the dollar."

------------------------------------------------------------------------

First, the numbers
Nobody has a better command of the data on the current state of the economy than Greenspan. And the picture he paints by his numbers isn't pretty. The national personal saving rate has plunged to an average of 1% in 2004, shockingly below the 7% average for the last three decades.

Indeed, we've been running up debt like there's no tomorrow. The unified federal budget (which is the budget that includes the current Social Security surpluses) is running a deficit equal to about 3.5% of gross domestic product. That deficit is only going to climb as outlays for Social Security, Medicare and Medicaid, now 8% of gross domestic product, climb to somewhere near 13% by 2030 as the baby boom generation ages and retires.

Meanwhile, the U.S. current account deficit, a measure of how much more we buy from foreigners than we sell to them, has climbed to 6% of gross domestic product. According to the Fed’s economists, you have to go back to the 19th century to find larger current account deficits as a percentage of the size of a country's economy. All this debt has been funded by an increase in the value of homes (and the size of home mortgages) on the domestic side, and the willingness of foreigners to hold IOUs denominated in U.S. dollars, such as U.S. Treasury bills and notes.

Buffett's approach is data-lite, but the data he does cite agree with the details of Greenspan's picture. Last year, we purchased $618 billion more in goods and services from the rest of the world than we sold. To pay for this current consumption, we're selling off our accumulated national wealth to the rest of the world at a rate of $1.8 billion a day. "Consequently, other countries and their citizens now own a net of about $3 trillion of the U.S.," Buffett wrote to his shareholders recently. Our overseas borrowing to fund the current account deficit is equivalent, he notes, to a family that sells off "part of its farm every day in order to finance its overconsumption."

Same data, different conclusions
What’s so striking is that from this remarkably similar picture of the current situation, Greenspan and Buffett reach almost diametrically opposed conclusions.

To Greenspan, it's no biggie. Even though we're running that huge trade deficit, the dollar's real exchange value, despite its recent decline, remains above its 1995 low, he told the Council on Foreign Relations. Interest rates on Treasury notes maturing 10 years in the future remain very low, despite the size of the federal deficit and the huge retirement obligations we're putting on the books. And there's no evidence that households are facing "inordinate financial pressures as a consequence of record-high levels of household debt relative to income."

The United States, Greenspan notes, almost with surprise, "appears to have been pressing a number of historic limits in recent years without experiencing the types of financial disruption that almost surely would have arisen in decades past."

Buffett, on the other hand, believes that we're headed for real trouble. "A country that is now aspiring to an 'Ownership Society' will not find happiness in -- and I'll use hyperbole for emphasis -- a 'Sharecropper's Society.' But that's precisely where our trade policies, supported by Republicans and Democrats alike, are taking us."

Buffet sees dire consequences
Buffett isn't forecasting economic collapse because he believes that foreigners will continue to lend to us: Foreign investors, he wrote in his letter to shareholders, "may view us as spending junkies, but they know we are rich junkies, as well."

But the consequences are still dire, Buffett believes. If current trends continue, a decade from now, just at the time when we'll need every dollar to pay for the retirement benefits of baby boomers, the United States will be sending 3% of its current annual output to the rest of the world as interest on the debt run up by its past consumption.

That royalty would run forever, unless we export more and consume less. And given the way global trade policies work, Buffett concludes, massively expanding U.S. exports isn't likely. Hence paying off this royalty would require a huge decline in U.S. consumption, Buffett says, with all sorts of nasty consequences for the global economy and the lives of U.S. workers and retirees. Don't pay it off and the already-projected squeeze on such frills as health care and education spending just gets worse.

Greenspan: The landing is soft
Don't worry, Greenspan says. We're headed for a soft landing. Foreigners will continue to send us their savings without demanding a huge increase in U.S. interest rates. Market forces --a fall in the price of the dollar and a consequent rise in U.S. exports and a drop in imports -- will gradually defuse the potential bomb represented by the huge increase in the U.S. trade deficit.

What's his logic?

Because the federal budget deficit, the run-up in consumer debt, projections of huge future retirement liabilities and the buildup in the trade deficit haven't resulted in the expected crisis to date -- and, in fact, haven't even produced the big projected hike in U.S. interest rates or a crash in the dollar -- something must be different this time. "Has something fundamental happened to the U.S. economy that enables us to disregard all the time-test criteria for assessing when economic imbalances become worrisome?" Greenspan asks.

Answering his own question, it's the increasing globalization of capital markets that has made all the difference. What Greenspan calls the "home bias" that kept investor's money in their national financial markets has eased so that investors seeking higher returns or diversification have sent more of their savings overseas. And the United States has been the prime beneficiary of that trend. (As you'd expect from Greenspan, he has data to support his belief in a decline in home bias: One measure of the propensity to invest at home for the developed countries representing four-fifths of world GDP has declined to 0.8 in 2003 from 0.97 in 1990.)

My problems with Greenspan's theories
I've got two problems with Greenspan's formulation. First, as Greenspan admits, a change in home bias doesn't solve the U.S. current account deficit; it just delays the reckoning. But since economists don't really know -- and can't reliably project -- the lag between trade deficits and deficit corrections, we don't really have any idea whether we are currently just in the lag period for a business-as-usual correction of the trade deficit or whether we've entered some unspecified lag period created by Greenspan's increasingly global financial markets.

It's an interesting theory. But as a guide to investing strategies, it leaves me completely without a road map or timeline.

Second, we've been down this "it's different this time" path with the Fed chairman before. Sometime after his more famous remarks about the irrational exuberance of the stock market, Greenspan became an apologist for higher valuations by citing the extraordinary productivity gains in the U.S. economy in the late 1990s. Historical measures of danger weren't valid for the then-current situation because the U.S. economy was growing so much faster than it had in other periods. Frankly, having bought into the first "it's different this time" argument to my pain and chagrin, I'm reluctant to buy into this new version.

The rate of capital-markets globalization remains vague. And while we know there must be some point at which foreigners will stop putting money into U.S. dollar-denominated investments, home bias or no, we have no idea where that point might be.

I've also paid attention to Greenspan's recent characterization of the problems of using productivity growth as a guide to policy. If you change "productivity" to "financial globalization," they're a warning to anyone who wants to use the newest version of "it's different this time" financial globalization to guide policy in the current global economy. "Productivity is notoriously difficult to predict . . . We have scant ability to infer the pace at which such (productivity) gains will pay out and, therefore, their implications for the growth of productivity over the longer run."

coolhand wrote: Hey Dr. D, good question. My response would be that foreign investors cannot afford to let the dollar slide too far so they buy treasuries to keep it propped up. If our economy sinks, so does theirs. It's a double-edged sword.

It is getting to the point that their GDP is getting hurt by holding USDs. There will be a run for the door and it is going to be ugly. Like I said, probably German is going to start dumping first...then the USD will fall to 74 overnight.

Yields on the 10yr will hit 8-9% in hours.

Foreign investors cannot afford to hold on to dollars anymore....the music is going to stop soon. Who is going to be left holding the bag? It will be anyone holding USDs.

:?

[cowboy]

All this gloom & doom stuff guys just because the dollar is sliding a little! Here I'll just add two cents to thiswhole thing. I don't read much of what any economist thinks because I feel 90% of the time they are just full of air. We take this deficit thing and make a big deal of it but in reality lets take a different view maybe one much more accurate.

We claim this is going to be a huge burden on our children but in reality it is going to benefit our children for many years. The US government if it builds a bridge or road will do it and put the whole thing against the budget for that year. You can just imagine what this does to the budget. To put it in respective that is treating it as a current expense instead of long terming it. This benefits everyone including the children of the future. This thing is very big so for an example say the government runs a $150 billion dollar deficit this year and we expand the national debt 2%. But at the same time we grew the econmy 5% then the national debt would actually shrink inrelative to the economy as a whole. Keep this up a few years and this ain't as huge as everyone may think.

Also their is another factor too in the mean time that helps and it is called research and development. I do not dny the importance of a balanced budget but you can see it is basically skrewered by the way we treat it. I just thought I would throw this out there. Have a good week end everyone!

cowboy wrote: All this gloom & doom stuff guys just because the dollar is sliding a little!
Down 71% in 7 years is a little??? 33% in the last two years.

We owe 85T USDs and there is only 9.5T USDs in existence. Think about that we own 9x more then there is USDs in the WORLD. Our debt is over 366% of our GDP.

If the govt spent $0 the next 33.8 years that is how long it will take to pay off the current 85T USD debt. However they are over 650B in the red for 2005.

In 2009 (at the current rate) our whole GDP will go to pay for interest payments for foreign central bankers - MEANING OUR WHOLE ECONONY IS GOING TO PAY OFF OUR CREDIT CARD INTEREST.

We have NOTHING to worry about. All is well.

Saraho Part Deux.:shock:

We are the #1 Exporter - Exporter of debt. Thank you very much.

How do you know when it is bed time in Michael Jackson's House? When the big hand is over the little hand....with that - have a great weekend.

One more - What is black and white and comes in little white cans? Michael Jackson.

Been a great week....going to kick back.

:D

In the past, foreign citizens accumulated U.S. dollars so they could purchase American-made goods. Today, foreign central banks accumulate dollars so that Americans can purchase foreign-made goods. In the past, profits from her exports allowed America to become the world's greatest lender. Today, in order to fund her gargantuan trade deficit, America has become the world's greatest borrower. The dollar's reserve currency status allows "rich" Americans to continuously borrow what "poor" foreigners save, and consume what foreigners produce. Without such status, America's consumption would be limited by its own production, and its borrowing confined by its domestic savings. In such a world, Americans would have a standard of living far lower than the one currently enjoyed.

The U.S. dollar index, which has fallen over 30% in three years, rose for the first week in five, after ending last week within 2% of its all time record low set back in 1992. With the dollar's technical and fundamental outlook deteriorating, a test of those lows is imminent. A significant break below this long term support could send the dollar tumbling. Without considerable, coordinated, global central bank intervention, the dollar's value could be halved. Even if massive, unprecedented intervention is successful, its effects will be temporary at best. This looming dollar crisis cannot be prevented, only delayed, and only at the expense of exacerbating the collapse.

The dollar was originally accepted as the world's reserve currency mainly because America flooded the world with low-cost, high-quality manufactured goods (being convertible into gold also helped). In America, the words "it's imported" were synonymous with "it's expensive." If a product malfunctioned, a common expression was "it must have been made in Japan." In fact, the Japanese had such a hard time overcoming this stereotype that they actually name a city in Japan, USA, so they could label their product "made in USA." Today the exact opposite is true, as imports are inexpensive, while domestically produced products are high cost. Japanese manufactures now enjoy the reputation for quality that American manufactures lost.

The main reason America was so competitive was that it had a comparative advantage in freedom. American business incurred lower taxes and faced fewer regulations than business in any other country. Further, Americans themselves were among the world's most frugal, with high domestic savings financing capital investments. Limited government and high savings combined to allow American business to pay the highest wages in the world while still producing the least expensive products. Today America is just as highly-taxed and regulated as most other countries, and more so than many, and Americans themselves are now among the world's most profligate.

For a time, America has been able make up for its lack of exports by offering its trading partners the promise of greater financial returns on their dollars investments. However, since America now has the lowest real interest rates in the world (they are, in fact, negative) and the most over-valued stock and real estate markets, private foreign investors have no compelling reason to accumulate dollars. Not surprisingly, the principal buyers have been foreign central banks, who after all are spending taxpayer's money. There can be no question that panicked foreign central banks, which bow to political expedience, not rational self-interest, are the buyers of last resort, and that the dollar's days as the world's reserve currency are numbered.

The main reason that the US dollar is still the world's reserve currency is that few understand how completely the fabric of the American economy has been rewoven. In fact, the US economy functions in a manner which would be completely impossible were it subject to normal market forces. However, by issuing the world's reserve currency, it has been immune to these forces, and thus its economy has evolved in a most unnatural way. Recent trial balloons launched by various Asian central banks, concerning diversifying their foreign exchange reserves; indicate that the dollar's reserve currency status may already be at risk. Once that status is lost, the process of returning to economic viability will be quite painful, and will involve substantial austerity from both the US government and its citizens.

[cowboy]

My thought is if you bought a foreign currency and don't own a dollar in your pocket as you say, doc. You better hope the market goes your way! About the time you think the dollar is going to bite the big one. It may bite you back. Just remember all my money is dollars and I'm in an area where were kind of enjoying the low dollar! I guess i ain't on a foreign island either without intenet. Must be tough! Uncle Sam will print you so much, then watchout when he starts to tightens up the faucet. I bet you just hate it buying fuelwhen your flying around in that private jet. It took them 20 years to get the dollar this low so I guess it only happens once in a while. Just a tree in the forest. One thing about a horse it don't use gas of course it causes some gas maybe when it farts. Oops don't tell all those enviromentalists they may want to put some damn device on him.

Good luck Cowboy.

For me to get back to even the USD would have to go up 45%. My Kiwi savings accounts are earning 7.5% (in a savings account).

I wish you the best. You must do what you think is the best for you.

:)

[cowboy]

Down that far! Man you should have pulled out sooner! :(Good luck to you too! I'll just keep plugging away on my horse and sticking that USD in my mattress. When the markets go all to hell, then I'll invest it again. Well got to go. See ya! Hey I got an idea since you have lots and I have not much of anything maybe you could find it in your heart to show me and my wife some of the world some how. Were probably never going to be able to see it with what I have to invest and the way I play this game. If you got any good ideas let me know i'll maul it over some.

[Rolo]

cowboy wrote: Man you should have pulled out sooner!

behehehehee...I would say that about his papa! :dude: <-- Frizz B.

cowboy wrote: I'll just keep plugging away on my horse and sticking that USD in my mattress.
A USD put in the matteress is 1945 is now worth .05 cents.

:( It is great to make witty comments...however your USD holdings are down 4% so far this year. I believe the problem is you do not grasp that you are losing money, I do.

Good luck! (I am not even going to ask what "plugging away on my horse" means).

[cowboy]

Yep! Down big time of course if it is only worth .05 then I aint out much.

[pyriel]

Good posts... It gave me something to think about. I can't argue with Dr. D's statistics about the dollar but I also can't argue with Cowboy's post that if something goes down then it will certainly have room to grow as well.

Dr. D, you are getting 7.5% return on your savings account from another country. However, the downside on that is you had to exchange your dollar to their currency. The problem lieswhen the dollar actually goes up, you are then left with a currency that would be worth less (in US). Remember, to buy back US dollar, it is usually alot more expensive than selling dollar. That is always the case with foreign currency and it holds true whether the dollar is down or up.

A balance of both should be the wiser choice. Thanks...

[Tpstew]

I was in Qatar. I don't really have a strategy for the I fund. I have noticed that in the past when I am out of stocks the I fund would do well. That is until the last few trading days. I was planning on pulling out Monday and got caught up doing other things that took my mind off my TSP (costly:X). Anyway, I went 60 40 C and S for tomorrow and will jump back in the G fund for Monday(hopefully I won't forget again). I use the data from Tom and some stuff from CNBC. Those guys are pretty good about giving info and I can usually make a good guess and it works out if I stay on top of it. All it takes is one day to let go by and I get all messed up.