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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (27842)3/5/2005 11:37:28 AM
From: Jim Willie CB  Read Replies (5) of 110194
 
even if the JYen had rallied against carry trade boys
the yen currency risk is relatively small, Mish
the key is the gains with leverage
they are typically in the 100% annual range
if the JYen rises 10%, then trim 10% off 100% returns
the leverage applies to the rate differential

these guys also borrow 20:1 without futures contracts
they live off the rate differential

THE YEN CARRY TRADE WILL LEAD TO US & JAPANESE RATES CONVERGING
this supports your view, not Russ's
at some point, Russ will throw his hands up in the air
and admit his own conundrum, with all due respect
the price inflation we have it with assets and costs
it is NOT with finished goods nor wages, which is the key
the price inflation we have seen fully supports Kondratiev Winter
prices CANNOT be passed along effectively
this is the total opposite to the 1970 decade
which the gold community has failed to recognize

the falling dollar will go hand in hand with falling long rates
because of the carry trade and foreign CB intervention
the hedge boys are only following the CB cue
the hedge fund yen carry trade is acting like a giant tunnel connecting the deflation in Japan to the USA
/ jim
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