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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (13645)	10/28/2008 1:24:53 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 71407

very much enjoyed our discussion about the JPY me too. thanks, i will check out your blog. you have bought the AUD? You are indeed flexible b/c for some time you were negative on the AUD. yes, i bought it yesterday and today, in soize. i also bought a similar amount of CAD. i was negative on AUD/CAD/BRL, etc. because they were all obvious beneficiaries of the JPY carry trade. not only HFs, but also "Mrs. Watanabe" and several million of her closest friends got clown short JPY and clown long all those other currencies... with leverage! not surprising to see the unwind. not sure whether BOJ wants to help them out as well. my guess is all the leveraged short-JPY/long-trash carry traders have already been carted off, but it's the thought that counts. i got back into BRL too early, but fortunately not in size. i honestly did not expect to get another shot at AUD but it has fallen so far and so quickly i figured what the heck. it seems to me AUD could do better than CAD but i prefer to hedge my bets, so i'm split 50/50 between them. another interesting story is the utter shellacking of KRW. apparently a lot of operating companies, who had no business in currency speculation, made big bets on a continued KRW rise. bad idea. now with KRW having cr*shed, these companies are forced to buy USD high and sell KRW low. some BKs have already resulted. also interesting, as i mentioned, is JPY vs. CHF (Swissie). for a long time they tracked each other pretty well, but in the last few months JPY has really separated. i used to buy into the notion that CHF was an equally viable carry-trade-unwind beneficiary, but luckily i dumped CHF for JPY some time ago. i guess i was thinking, "Why settle for second best?" still, it was very lucky and i certainly would not have expected this kind of outperformance by JPY vs. CHF. check it out:

To: gregor_us who wrote (13645)	10/28/2008 1:47:48 PM
From: philv	Respond to of 71407

I think the rising unemployment, be it in Japan or the US will be the limiting factor, the limiter to the rising currency. The economy will be stressed as unemployment rises, and the cost to the government increases. Also of course, even if imports are cheap, you have to have a job to earn the money to buy it. I think unemployment is the feed back loop to regulate the currency and would definitely cause political changes as it rises. If the governments won't act voluntarily, the masses of unemployed would force it.