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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (2322)	11/18/2003 12:17:58 PM
From: Real Man	Read Replies (2) \| Respond to of 110194

Thanks, Jim - you wrote a very interesting article. I have suspected for some time now that September Yen breakout would break the backbone of the credit bubble, and lead to a strong appreciation of gold. It has not happened, yet. So far it looks like currencies and bonds move opposite to each other - bond purchases result in USD hedges. Then, USD declines. As treasuries get sold, the USD hedges are lifted. Just my "assumption", I'm not sure exactly why they are anticorrelated. This is a weird counter-intuitive market. It has been such for a long time, because derivative trading totally dominates the volume of most markets. I guess, a lot of derivatives are set to go up in smoke as Yen rises - the yen carry trade was a lot more popular than gold carry trade. Yet another reason for the big dump of treasuries. Perhaps, by purchasing treasuries and hedging the Yen rise, derivative players are trying to postpone the inevitable? Ka-BOOM! They will dump stocks to all time lows first, if needed, I'm sure! (To keep treasury prices high)