next up: DOLLAR CARRY TRADE, hyper-declines via futures
in the 1990's the YEN CARRY TRADE enabled the US to screw and kill the Japanese economy
borrow yen via JGBonds at 1%
sell it to buy USTBonds at 5-8%
it was like taking candy from a slanteyed baby
(sorry, couldnt resist)
the result was the YEN declined quickly, profits were enormous, and DOLLAR got stronger
in the later 1990's the GOLD CARRY TRADE enabled the US to steal from the 2000's decade by using gold to buy false prosperity
borrow gold from Fed and Bullion Bankers at 1%
sell it to buy USTBonds at 5-8%
it was like taking candy from a drunken fat slob American
(no apology)
the result was GOLD declined steadily, profits were enormous, and DOLLAR got even stronger
BUT... the US Stock Market and Bond Market attracted world money on a massive scale
it was the Great Illusion, perpetrated by Copperfield himself
at a cost though, since now $2000 billion rests outside our country in foreign hands
many of them are not our friends
(e.g. China, Arabs)
now GOLD is being margin called back home
hedged miners are getting margin called, now a BUYER !!!
Barrick's news two weeks ago was a pure & simple margin call
HERE COMES THE SCARY PART:
the USDollar is now beginning to be the Revenged Victim of a new carry trade
THE DOLLAR CARRY TRADE
borrow shorterm dollars at 1.75%, GreenSperm's stuck rate
sell USTBonds to buy Eurobonds at 5.5% or so (unsure exactly)
it is not taking candy anymore
IT IS PICKPOCKETING ALAN GREENSPAN AND TREZ SECY ONEILL !!!
the result will be DOLLAR in decline steadily, profits will be enormous
PUT PROFITS INTO GOLD
using futures markets accelerates the decline in dollar
and accelerates the rise in gold
alternative:
use sold dollar to buy half EuroBonds, half GOLD
this will get close to out of control
GreenScrotum CANNOT print new dollars to ward off the run
to do so would increase USdollars already in oversupply
it would also signal a panicky Fed Chairman
(behind closed doors that is EXACTLY what he is)
GreenShorts CANNOT raise rates to eliminate the carry trade
to do so would kill corporate profits, since 75% of them have swapped longterm to shorterm debt
to do so would also kill the US stock market
stocks are horribly overvalued, high PEratios
prepare for a brush with a US Depression
caused by a run on the dollar
the longbond should rise in yield and surprise everybody
well, not me, and not those who read this
but surely the NumbNuts who follow Voltaire
he still thinks the Fed can "just write a check"
idiocy precedes bankruptcy
/ jim |
