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

To: CalculatedRisk who wrote (66945)	7/27/2006 8:56:39 AM
From: russwinter	Respond to of 110194

This beige book statement indicates the Wizards are just giving inflation lip service (words like "scattered"). This data talk is a smoke screen. The only thing they care about is maintaining foreign capital flows to keep Ponzi finance afloat. That's what the yield curve is really telling you. My SWAG is that if the key carry trade currencies stay suppressed, then they will pause. If the Yen especially starts popping, say above 88.50, they will increase, with a dovish statement. If the Yen hits 89.50, statement will be more hawkish, especially if the Euro rallies too. Also watch for any revaluation out of China, they'd have to raise then. That scenario is a possibility and would upset the apple cart. Right now the COTs indicate the Yen could rally, but maybe not enough, the Euro less so, thus we will likely get a pause, but with a hawkish statement. The BOJ has now drained reserves down to 9.36 trillion yen (was 17.65 on June 20, 15.88 on June 30), the low for this cycle, indicating they are slowly back to work.