Paul Chertkow, Global Head Foreign Exchange Strategy for the Bank of Tokyo Mitsubishi made these points in an interview on Bloomberg Television.
1. US is in a recession. There is a real risk of a protracted downturn because this is not a typical business slowdown.
2. Interest rates will be cut by more than expected, possibly to 1% by end of June.
3. There is real risk that Mideast Treasuries will trigger a dollar crisis if they break their dollar peg.
4. Larry Summers says 'current crisis worst since WWII' and Chertkow agrees.
5. Foreign ompanies are content to see stronger currencies to relieve high imported commodity prices.
6. Yen down to 90 is realistic with next stop to 80, and 160 for the Euro.
7. Risk is that dollar will fall "well beyond expectations" for most currencies but especially the asian currencies.
8. US "strong dollar policy" is nonsense.
9. US life insurance companies and pension funds have 'a lot of disclosure left' on bad debt.
10. Dollar crisis is 'not inevitable' but cannot see anything to stop it and does not see official intervention as a real possibility at these levels. Thinks the crisis will end if the US Government comes in and underpins the mortgage market directly.
Paul Chertkow - Bank of Tokyo-Mitsubishi on Bloomberg Television
“Thus, it should be understood that when pro-US figures use the term, 'rules-based international order,' they are not referring to anything analogous to the rule of law. Quite the opposite, they are using Orwellian language to describe a system in which essentially no rules can be established and/or observed, given that the dominant state has the prerogative to violate and/or rewrite “rules” at its whim.” Aaron Good, American Exception