it's nice to learn a lot history facts from this article.

no offense to Facai lao da.

Let me argue with these two guys.

=========================================================
1. what is "Currencies Nationalisation"? Not defined in this article. my understanding is "nationalization of BAD (B-A-D) banks ≠ Currencies Nationalisation"

2. "The notion that nationalisation of banks should lead to currency weakness is popular mainly because it is intuitive..."

Actually the problem is not the "nationalisation" but the means to nationalize. The problem is "the fiscal burden of the government"

3. Then the two British guys used the "The Inconvenient Historical Fact" to defend their own intuition:

"... The dollar index essentially moved sideways in the early 1990s. The dollar did falter in 1994/95, but that was attributed more to the inflation scare than to the S&L Crisis...."

their point is to blame the inflation. but they don't care where the inflation scare was from.


4. then, "The case of the US at present is also illustrative."

their reasoning is: since US $ is still strong as of sep 19, 2008, there is no evidence that ‘nationalisation = currency weakness’. but what will happen in the next year, or next fews years, has nothing to do with the "nationlisaion".

5. ironically, there is almost nothing wrong when one just reads the conclusion:

"In sum, banking crises are unambiguously bad for currencies, but nationalisation per se does not make the situation worse for currencies. In fact, it often marks the low in the currencies."

6. This following statement tells me that these two guys are not stupid at all. b/c that would be the exactly real situation we must be facing in the near future.

"Having said the above, the US does have quite a worrisome fiscal outlook in the years ahead, which may eventually have an impact on the dollar. Setting aside the issue of the fiscal burden associated with the assistance the official sector has provided the financial sector, US expenditures may be too high and revenue buoyancy may be undermined by the weak equity and property markets."

7. in sum, these two guys 偷换概念. maybe their assignment was just to 吹捧 "nationlisation"

=========================================================
my 2 cents:

1. $ is a very important tool for the US. weak dollar is good to let us see good ERs from non-financial companies. strong dollar is good for the government to sell more garbages to overseas to loot more fortunes.

2. we haven't seen the depreciation of US $. this doesn't necessarily mean it will sustain its strength.

3. all what the government promised is just a number. how the rescue plan is planned and how to be implemented is still a riddle, YET.

4. cautious, cautious,cautious, cash is the king. some position of gold might be the queen.

5. 真正的大底应该是一些技术大牛牛见外婆，没几个人喊抄底的时候。

=========================================================
totally non-professional guess. not any advice to anyone.