yen carry trade from 1994 to 2000
borrow Japanese money at 1% absurd low levels
take money, sell its yen form into dollar form
buy USTBonds for 5-8% over that time span
end result:
huge profits in cash market
or huuggggger profits in futures market
yen takes a kick in the nuts down a notch each quarter
dollar steadily rises
US rates steadily fall
US economy enjoys widespread earnings rise, expansion
or was it really an expansion?
blame the prosperity on the tech productivity
gold carry trade from 1995 to 2001
borrow gold in Western Central Banks at 1% absurd low levels
take money, sell that gold still in dollar form
buy USTBonds for 5-8% over that time span
end result:
huge profits in cash market
or huuggggger profits in futures market
gold takes a kick in the nuts down a notch each quarter
dollar steadily rises
US rates steadily fall
US economy enjoys widespread earnings rise, expansion
or was it really an expansion?
blame the prosperity on the tech productivity
now both are done, gone, over, complete
BUT 50% OF USA GOLD IS NOW IN FORM OF IOU'S
the Federal Reserve still shows all the leased and sold gold as on its books
NOW COMES THE MARGIN CALL, BEGUN WITH AMERICAN BARRICK GOLD
current status:
$2000 billion of USTBonds rest in foreign hands (45%)
a substantial portion of which came from leveraged carry trade
carry trade via futures is a hyper-engine, very efficient
the carry trade is to financial markets what the Trade Winds are to colonial ocean travel
now Japan has a trashed banking system, near zero bounded box interest rates, and a horribly stuck economy
the yen carry trade enabled Japan to kill its currency and economy
no better word to use: KILL
we borrowed from future pain & suffering in 2000 decade
and enjoyed false cheated prosperity in 1990 decade
our entire culture is "live for today, pay for it tomorrow"
why should our financial lives revolving around gold, dollar, bonds, interest rates, credit cards, home equity loans, bankruptcy be different
????????????????
continuation of currency dollar outflow discussion...
Puplava compares financial markets to weather
the best analogy I have ever heard
imagine a high pressure hot zone of 92 temps, sunny
now next week we want to get that western middle pressure zone of 80 temps, sunny with patchy nice clouds
sure, we want to get the better more moderate weather
but between the 92 and the 80 lies a thunderstorm
perhaps with some broken tree limbs like what happened in Pitt last weekend
some power outages in entire little boroughs for two days
same thing in financial markets now
dollar outflows back home to Europe and Asia
Euro stocks are doing better
Nikkei stocks are doing better
we in USA want the lower 80 temps for our corporations to give them better pricing with lower dollar
now we are scorching with 92 temps with lost competitive world pricing with the ultra-strong suicidal dollar
Puplava thinks the deflation credit-based economy coupled with the cash-based energy and commodity economy mixes as high and low pressure zones, with the currency jetstream shifting away from the dollar, all to produce a PERFECT STORM
prepare for it
he mapped it out a year ago
it is unfolding EXACTLY according to script
his updates confirm EVERYTHING is occurring to script still
hope this helps
dont worry about a run on the banks
that is the extreme if & when a Democrat Klutz sits in the White House and a Keynesian Effing Moron runs the Federal Reserve
dont count either out
this country is astonshingly illiterate with finances, economics, and accounting
our culture lionizes thieves and creates heros out of them e.g. JD Rockefeller, Joe Kennedy, Leland Stanford
/ jim |
