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

To: KyrosL who wrote (85740)	8/30/2007 3:43:02 PM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

Even countries with strong currencies are admitting an inflation problem and want to bring inflation down. It is strange that the only two countries on the planet who are supposedly not having an inflation problem are the ones with the weakest currencies ( US and Japan)

To: KyrosL who wrote (85740)	8/30/2007 9:15:51 PM
From: gregor_us	Read Replies (3) \| Respond to of 110194

It's Clear the JPY has found new favor as a speculative long trade since February. It's amazing how quickly everyone has caught on. I agree with you, and your possible implication: for it's my view that the BOJ can mow down both longs and shorts in the JPY at any time. Over the past two years, the BOJ has been very reactive to the price signal from global stock markets. When the Yen ramps, and the Nikkei tanks, they back off quick. I mean, they talk resistance but they cave, quickly. This is why I don't like the JPY at all, either way. The shadow of the BOJ is simply too long. I recently designed a portfolio for family, and they wanted a currency mix, so I used equal parts AUD, CAD, CHF, and Swedish Krona. For a systemic meltdown hedge I like the CHF much, much better than the JPY. But on the other side of that I love the AUD and have loved the AUD for years (I've been long since .5000), for several reasons. 1. It still attracts an antiquated viewpoint that deems it very, very high-risk, a view that concentrates only on Australia's current account deficit but ignores Canberra's balance sheet.*. And 2. I think the AUD is building therefore a surprising anti-risk component to its name. JPY long is a trade, I think. Not an investment. *There were a whole bunch of wrong answers on this board the other night about Australia's government debt position. The Government of Australia now has ZERO debt. It was all paid off late last year. Again, the nags on the AUD continue to harp on "external" debt, carried by citizens, and businesses. Would that the US was in the position of Australia's surpluses, which they are wisely spending an a whole host if investments in education, transportaion and health. Gregor PS: Fresh News on Japan inflation/deflation tonight: Consumer Prices Fall for Sixth-Straight Month, Signals Deflation Not Over Japan's consumer prices declined for a sixth straight month in July, signaling the world's second-largest economy has yet to beat deflation. bloomberg.com