I find Doug Noland's piece very interesting. Especially interesting for gold bugs is the Yen part. If you remember
1999 - when BOJ intervention at Y=150 failed, gold shot up 80 bucks in 3 days or so, as Yen went from 155 to 115.
That is, if I remember it correctly. Gold tanked $20 from
275 to 255 before that, after the infamous announcement
from BOE. A repeat, anyone? The yen manipulation is not
producing any results, and BOJ is running low on
funds to manipulate it. On the other hand, the Buck at 92 is about 2 standard deviations away from the mean (which is
above). This means, if it goes below quickly, it's a "tail"
in derivatives. Nobody knows where the "tail" ends - so,
they will likely panic! Here is the Yen chart
quotes.ino.com
Here is regression analysis for Yen, showing there MUST be a dump (of the Yen vs the buck) or else.... "tail" , and Yen
will continue to appreciate very rapidly!
fx.sauder.ubc.ca
Here is Doug Noland's piece, and the quoted part about the
Yen. Looks like BOJ has SPENT the cash alotted for dollar support for the year. So? Will others on the market will just rush in to sell it? I bet NOT!
prudentbear.com
October 1 – Associated Press: "Japan spent more than 4 trillion yen
($36.2 billion) over the last month intervening in currency markets,
adding to a record figure it has spent this year in an aggressive yen-
weakening campaign that has been criticized by its trading partners…
That brought the total for the year to a 13.48 trillion yen ($122.01
billion)."
Despite massive purchases, the yen is trading at near 33-month highs
against the dollar.
October 3 – Bloomberg: "Taiwan's foreign-currency reserves, the
third-highest in the world, rose to a record $190.6 billion in
September (up from August's $185.7 billion)."
October 1 – Market News International (Matthew Saltmarsh): "The
changing balance of G-3 fundamentals means that the yen is likely to
continue appreciating, probably testing the key Y100 level against
the dollar at some point, according to Eisuke Sakakibara, a former
senior Japanese official… `I am afraid that something quite
destabilising may be coming in the next months', he said in an
interview on the sidelines of a conference of Asia-Europe region
building here. Sakakibara noted that the effectiveness of Japan's
currency interventions has `declined dramatically,' and as a
result, `the yen will shoot up towards Y100 and the euro will
continue to increase -- and that will really tilt the balance in the
international financial arena.' `Intervention alone cannot hold the
(yen's) rate. Intervention with the wind works, but leaning against
the wind doesn't work, and now the Japanese interventions are leaning
against the wind.' Over the last six months, the Bank of Japan's
dollar buying has been able to stem the yen's rise up to a point, but
that has been `because of market uncertainties.' `The perception of
the recovery in Japan was not strong. But within the last two months
or so there has been a sudden admission that Japan is recovering.'" |
