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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: Bill Murphy who wrote (369)7/19/1998 11:06:00 AM
From: The Barracuda™  Read Replies (2) of 81400
 
Bill,

If a central bank wanted to support the Yen, would the buying of gold accomplish the same thing? The Gold market is very small, so if gold rallied, the US bond/gold carry trade would have to be unwound which would cause the Yen/US bond carry trade to be unwound.

It seems to me, that the buying of gold would have a leveraged effect
on the yen as according to your estimates there are 8000 mtons of gold shorted. I think it would be a lot cheaper to bump the gold price up to $500 vs the amount of money it takes for central banks actually enter the market and buy yen. Why not make the hedge funds do it for the central banks?

Any Comments? Agree?
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