I just noticed a very interesting post on Dan Norcini's website, noting how the Bank of Japan has had to "intervene in currency markets" (i.e. attack its own currency) whenever the market is moving toward "safe haven trades" in times of economic fear/stress.

Let me rephrase this. The economy-of-choice for investors (too stupid to put their money into precious metals) is NOT the U.S. but rather flood/earthquake/nuclear-ravaged Japan - which is sitting with the largest (official) "national debt" in the world, and is in the midst of a twenty YEAR economic depression.

Put this into perspective every time the propaganda machine crows about the U.S. being seen as a "safe haven". When your economy is viewed as second-best (or at least second-safest) in a comparison with JAPAN then you obviously have NOTHING to brag about...




"FOMC impact on the Yen "

www.traderdannorcini.blogspot.com/2012/0...c-impact-on-yen.html

Note the following chart of the Japanese Yen and you can see the points at which the Bank of Japan intervened into the Foreign Exchange markets to knock it down and lower its value for the sake of their export market. One would be hard pressed to find a reason for the Yen to rally when the Japanese economy is so weak and its official interest rate environment is about as low as that of the US.

Still, the Yen has rallied on "Safe Haven" trades. Whenever traders were feeling risk averse, they would buy the Yen on the crosses along with the Dollar and sell everything else. To put a stop to that the Bank of Japan has twice intervened with rather dramatic results. Unfortunately for them, traders have simply used the intervention to come right back in and bid the Yen back higher basically negating the gargantuan effort required to derail it.

Now comes along the FOMC with its ZERO INTEREST RATE POLICY and it has basically the same impact on the Yen as did the BOJ intervention - it moves LOWER. The reason for this is that the liquidity party is a green light for the risk trades (why else would copper be at a nonsensical $4.00 pound?). In that environment, no one wants to buy the Yen so down it goes.

One has to suspect that the FED and the BOJ are closely communicating these days as the impact of monetary policy is working nicely for both of them as neither one particularly wants to see a strong rally in their respective currency...

[chart not included]

I was going to start a new thread, but I saw the Japan discussion.

So what do you guys think about that Japan is now running a trade deficit. Is this game over Japan? This ensures that they'll have higher interest rates down the road. What scares the crap out of me is that Japan has 900 billion of U.S. (or something like that). So if the Japanese have higher rates, then the U.S. is in BIG BIG trouble.

ramblerboy368 wrote:
I was going to start a new thread, but I saw the Japan discussion.

So what do you guys think about that Japan is now running a trade deficit. Is this game over Japan? This ensures that they'll have higher interest rates down the road. What scares the crap out of me is that Japan has 900 billion of U.S. (or something like that). So if the Japanese have higher rates, then the U.S. is in BIG BIG trouble.


"This ensures they'll have higher interest rates down the road."

OR, Japan can simply do what the U.S. is doing: secretly counterfeit huge amounts of its own paper, and then "buy" its own bonds at whatever (fantasy) prices it wants to write-in.

Have a look at this recent post:

"The $15 TRILLION money-laundering mystery!! "
www.bullionbullscanada.com/bulletin-boar...y-laundering-mystery

The U.S. is now OBVIOUSLY counterfeiting paper to (pretend to) "buy" its own bonds. Nations are OPENLY confiscating assets to delay their own debt-defaults.

We are getting VERY close to total collapse of another fiat currency system - unfortunately this one is GLOBAL. Between now and implosion, it would/will be VERY dangerous to ASSUME that any fundamentals will play out as they should.

ANYTHING IS POSSIBLE!