Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: NOW who wrote (2875)	3/26/2004 11:19:08 AM
From: mishedlo	Read Replies (1) of 116555

The Message Behind JCBs Announcement on Currency Intervention by John Lee safehaven.com (March 17) ...... We visited Japan also. Japanese in our view are deliberate, they like to save face. They avoid confrontation, and instead they drop hints. We don't think it's a coincidence that JCB came out one day before the Fed's rate announcement to make news. They were politely asking the Fed to raise interest rate to support the dollar. Failure to respond they hinted, the Fed would risk a plunge in the dollar index. JCB even specified a deadline for the Fed to act - the end of March. In fact, we believe this was the second warning to the US government to put its house in order. The first warning came on January 28th when the following made headlines. "Japan says to cautiously consider gold in reserves" Again, you have to be quite mentally-challenged to declare the intention to buy gold, especially when you have USD $500billion in your pocket. The Fed has essentially stuck its high nose at the JCB. We doubt that the Japanese will take this arrogance lightly. In the short term however, we don't expect JCB to stop buying the dollar anytime soon. =========================================================== They were politely asking the Fed to raise interest rate to support the dollar. Failure to respond they hinted, the Fed would risk a plunge in the dollar index. JCB even specified a deadline for the Fed to act - the end of March. Failure to respond would PLUNGE the US$? Does not seem like it does it? Besides, the FED WANTS a plunging US$. Piss poor analysis of the situation IMO. Rising treasury yields will cause the US$ to rally IMO, especially in light of Europe on the verge of cutting. Mish

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