[Cowperson]

My two cents in a drive-by . . .

I would think that any stock market run-up would see insiders eventually and increasingly liquidating positions as normal diversification of their personal portfolios. Common sense.

Mr. Softy (Bill Gates) routinely sells hundreds of millions of dollars of Microsoft every year, if not more, rain or shine, citing "diversification" as the reason. I think he's the largest single shareholder of Canadian National Railways and recently increased his holdings . . . . transportation stocks are early predictors of recession so if he thinks a disaster is on the way, he has a strange way of showing it.

One of the articles Looger posted flatly states that the goal of the Federal Reserve is currency stabilization. As our friend Lurch and I agreed a week or so ago, central banks focus on inflation goals, with currency manipulation used as a tool in achieving those goals.

In 2003, then Treasury Secretary basically said the USA was backing off a strong dollar policy . . . . and the currency immediately tanked.

http://news.bbc.co.uk/2/hi/business/3019291.stm

That in turn brings up the interesting question of whether or not foreign governments actually want a weak USA currency, something that makes their own exports expensive in the all important American market . . . . and makes American exports cheaper in their own.

From a post I wrote in May:

In Canada, we're used to a fairly stable relationship with the USA dollar which might cloud our view of how currency relationships more often work.

It is very easy to demonstrate the USA dollar has had frequent and dramatic moves - both positive and negative -within relatively short time frames against other major and minor currencies through the last 25 years.

As an example, the high/low difference in the USA dollar/Japanese Yen relationship between 1990 and 1996 was 98%.

The USA dollar/Swiss Franc relationship varied 20%-25% six times - up and down - between 1990 and 1996.

The British Pound/USA dollar relationship varied 30% between October 1992 and February 1993.

Some might even speculate the abrupt decline of the USA dollar a few years ago might have been a deliberate pulling of the plug to get China to float its currency versus the policy of pegging it at an artificially low value to the dollar (a conspiracy theory!!!). Certainly, European exporters trying to access the number one consuming market in the world, America, can't be too happy about a 7%-8% rise in the Euro against the dollar so far this year. But American exporters might be quite happy about it.

Also, in a thread here in the last week or so, I posted this link pointing out relative debt/GDP comparison numbers for countries around the world. The link:

http://www.answers.com/topic/list-of...by-public-debt

The eventual argument about whether deficits matter:

http://money.cnn.com/2004/02/02/news...dget/index.htm

Lastly, regarding the original intent of the thread, probably the most important point on whether the USA is in trouble or not, there have been six instances since 1960 where we have seen a yield curve inversion like we saw developing over the last summer.

In 100% of those six instances, an economic recession showed up an average of 10 months down the road . . . . which would make the timing roughly sometime in the spring or early summer this case.

When the curve inverts, economic indicators might still be looking fine . . . . but deteriorate as time moves on.

USA job numbers today:

http://www.usatoday.com/money/econom...november_x.htm

By coincidence, the New York Times today with a piece on wage growth:

http://www.nytimes.com/2006/12/08/bu...rtner=homepage

This issue has been brought up as a reason for the invasion of Iraq as Saddam was going to start selling oil in Euros instead of US dollars. Iran is threatening to do the same. The Saudi Arabia and OPEC sell oil in US dollars thus forcing everyone to buy US dollars in order to purchase oil. If OPEC switched to the Euro, the US is in big trouble.

Good grief.

Cowperson