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         Daily Blog 
     Tiger Software

                             July 3,  2007

   >>> 
Weakness in The US Dollar Will Likely
            Bring Higher US Interest Rates.
========================================
   William Schmidt,     - Tiger Software's Creator
   (C) 2007 William Schmidt, Ph. D.  -
   All Rights Reserved. 

   No reproductions of this blog or quoting from it
   without explicit written consent by its author is
   permitted.

   Send any comments or questions
   to william_schmidt@hotmail.com

    People have asked me to write a Daily Blog.  
    They seem to want me to give them a thought
    or two each day.  About what?    Well, we'll
    just have to wait and see.  As, I see it, a blog
    is a personal statement.  I will try to make it
    entertaining and relate it mostly to the stock market. 

     I do promise not to belabor the obvious. So, I hope
    these thoughts, reflections and finds are worth your
    time.  I will give you my best
.


   As it fills up, it will be organized by month and topic  
   Look for something new most every day.  If you find
   it helpful, buy something from us.  You'll be glad you
   did.  Tiger could easily be one the best investments you
   ever made. 

                                                              July 3, 2007

  The Weakness in The US Dollar Will Likely Bring Higher US Interest Rates

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        The British Pound has just made a 26 year high versus the Dollar.  The last time the
        Dollar was this weak was in June 1981, a point when the DJI and the US market
        were about to fall by almost 20% over the next few months.


                     Bear Market of 1981 began when British ound Was Last This High.

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     British interest rates are going to be raised. 
The Deputy Governor of the| Bank of England
has stated that UK interest rates are too low.  
Many analysts forecast  that the Bank will raise
interest rates to 5.75%  this week.
When Gordon
Brown (now the Prime Minister) took over as
Chancellor after the Labour Party's landslide
victory in 1997, he quickly granted the Bank of
England, which is responsible for setting interest
rates, independence from the government.   Now
as Prime Minister, he may regret this.  The Bank
of England had been privately owned until 1946,
when an act of the Labour controlled Parliament
nationalized it, with compensation.
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    Chanellors Who Become Prime Ministers Follow The Orthodox
    Persuasion of  "The City", Britain's Wall Street.

    My dissertaion at Columbia University was about how Chancellors of the
Exchequer, who live at 11 Downing Street,  commonly became Prime Ministers,
provided they did not "rock the boat" and followed the orthodox expectations
of the Bank of England and protected the Pound and cut back governmental
spending, no matter the cost.  By way of example, Neville Chamberlain had
been Chancellor before becoming Prime Minister in 1933.  He fought over
and over with Churchill in the mid 30's and denied the latter's Air Ministry the
funding needed to prepare for World War II.

     A tighter fiscal and monetary policy from the ex-ExChequer Chancellor
who is now PM will boost the British Pound (which made a new high today),
but it will slow the economic boom down and probably force the US to tighten its
interest rates, to compete for international financing.   Higher interest rates in
Europe will spread here quickly, since the dollar is so weak.  That explains why|
US Housing stocks were so weak today, even with the big rally. 

The chart below shows TigerSoft's Index of 32 US Housing Stocks.  Not the
new lows.
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  Scottish Humor:  

Gordon and the donkey

 

Many years ago a young Scot called Gordon bought a donkey from an old farmer for 100.00. The farmer agreed to deliver the donkey the next day. When the farmer drove up the next day, he said, "Sorry son, but I have some bad news...the donkey is on my truck, but he's dead."

The young Scotsman replied, "Well then, just give me my money back." The farmer confessed, "I can't do that. I've already spent it." The Scotsman said, "OK then, just unload the donkey anyway". The farmer asked, "What are you going to do with him?" The young man said, "I'm going to raffle him off." To which the farmer exclaimed, "You can't raffle off a dead donkey!" But the Scot, with a big smile on his face, said "Of course I can. Just watch me. I just won't tell anybody that he's dead."

A month later the two met up again and the farmer asked, "What happened with that dead donkey?"

The young Scot said, "I raffled him off. I sold 500 tickets at two pounds a piece and made a huge profit." Totally amazed, the farmer asked, "Didn't anyone complain that you had stolen their money because you lied about the donkey being dead?" And the young man replied, "The only person who found out about the donkey being dead was the raffle winner, when he came to claim his prize. So I gave him his 2 back plus 200 extra, which is double the going value of a donkey, and he thought I was wonderful."

The young Scotsman grew up and eventually became the Chancellor of the Exchequer, and no matter how many times he lied or how much money he stole from the voters, as long as he gave some of them back some of the stolen money, most of them thought he was wonderful.

The moral of this story is that, if you think Gordon is about to play fair and do something for the everyday people of the country think again my friend, because you'll be better off flogging a dead donkey

(Source: arksaccjokes.blogspot.com/2007_04_01_archive.html   )



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