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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: The Barracuda™ who wrote (80365)	12/30/2001 4:02:55 PM
From: Kaena™	Respond to of 116759

I agree that the Yen is being "manipulated" contrary to the popular belief that it's falling of its own accord due to the never ending negative economic news coming out of Japan (recession, increased bankruptcies, declining real estate prices, increasing unemployment, etc.) And because this has such an effect on the dollar (and gold), I'd like to take a moment to discuss it. I believe that the Yen is being driven lower (supported by both the Fed and Bank of Japan for some obvious reasons below) by a renewed interest in the Yen "carry trade." Because of the support of the Fed and BOJ, the trade seems to be very low risk as it was during the recent 97-98 time frame. I believe the Fed needs a continued strong dollar as our money supply has continued to soar rivaling the early 1970s to hide/postpone the effects of inflation. (Contrary to popular belief, I don't think deflation is a threat at all). And of course Japan needs to devalue in order to export their way out of their recession. The danger I see is when the Yen inevitably reverses to the upside. As happened in the fall of 98, there wasn't much liquidity causing the Yen to violently surge to the upside. Similarly in the present time frame over the next 2-3 months, the "Yen Carry Trade" being very crowded may very well have a violent reversal to the upside for several possible reasons I won't go into. Over this same time frame, the dollar has the potential for further upside from a technical perspective (as well as and especially considering that some Europeans may be hedging their currency transitions to the Euro with a portion of US Dollars). My speculation is that gold marks time over the next 2-3 months (barring any earth-shattering events or very possible economical upheavals-Argentina, more Enron type bankruptcies, banking derivative meltdown, war, etc). And by April, we get a reversal in both the Yen and the dollar (as well as the other currencies such as the SF and Euro) whereby gold finally takes off (breaks $300 resistance). In the mean time with little downside risk and major upside potential, I feel that holding gold and silver stocks that have been accumulated over the past 1 1/2 years makes the most sense. I would also view April/May as a possible time frame that stock markets will again tumble to new lows after their bear market rallies since 9/11. Also I believe commodities and related stocks are already in the process of a new bull market as further evidence.