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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (22064)11/19/2004 7:05:44 PM
From: russwinter  Read Replies (1) of 110194
 
< given today's currency and bond-market action, it appears that the Japanese have decided to stop aggressively rigging the dollar/yen rate and, by extension, the Treasury market. >

Also look for the Chinese to try and "reorganize their economy" (and the US by extension). They announce that the USD reserves they've accumulated will be used for a massive infrastructure buildout, rather than subsidizing American consumers and homeowners with vendor financing(this will be a displacement event). Combined with a deemphasis on Asian exporting (at a loss), the result will be a large US interest rate spike, and also a rally or even firming of the USD. In fact they will find out that setting higher interest rates for the US is sounder policy than printing money and thus hyperinflating their own economies. Higher US rates also serves to preserve the remaining value of the Old Maid cards they hold.

The trade: Gold and foreign currency correction, US bond sell off, world wide stock market sell off, basic commodities mixed to higher (China will use them domestically, supply driven issues).

Funds have their biggest anti-US and gold bets on ever, with commercials taking the opposite. Commercials have their biggest stock market short (see stock index subtotal)
64.82.65.31
on since 2000-01. Commercials were actually long heating oil in latest report, but rallied big today ahead of COT release.
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