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Non-Tech : Invest / LTD
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To: Lucretius who wrote (4045)10/10/1998 2:36:00 PM
From: 007  Read Replies (1) of 14427
 
Anybody think that the dollar's fall and gold's fall are linked in a logical manner?

It goes like this: Yen goes up on the dollar, hedge funds are squeezed to buy Yen to pay back yen-carry loans, they dump other assets like treasuries to raise funds to buy yen, but if they're stuck in positions they can't unwind just yet then maybe they borrow more gold and sell it to raise the funds for the yen.

Banks that are desperate to avert catastrophic losses that would be result from forced hedge-fund-unwinding may be loaning more gold so the funds can rotate their debt out of the yen-carry and further into the gold-carry. Perhaps they're even loaning treasuries and creating a treasury-carry.

Just speculation....
OO7
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