Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: prosperous who wrote (67852)	11/6/2010 7:39:00 PM
From: TobagoJack	Respond to of 217802

from altruistic e-mail tray From: H Sent: Sat, November 6, 2010 10:00:02 PM Subject: Re: Observations - Week of November 8 the important thing to remember about the yen is that the BoJ has by far the least inflationary policy of the major central banks since the eruption of the 2008 crisis (and even before that time, money supply growth in Japan was way below that in the US and euro-area). it is therefore only logical for the yen to be strong. this will change once the Japanese government feels compelled to finance its growing debt pile via debt monetization. Once the point is reached when the debt can no longer be financed domestically , the choices for Japan are: 1. outright default, 2. borrowing from abroad, 3. inflation/debt monetization 1. won't happen because most of the holders of JGBs are in fact residing in Japan (98%). it would be political suicide. 2. won't happen because foreign lenders will not be satisfied with minuscule interest rates. Japan could probably not afford to pay the rates foreigners would ask to mitigate the risk of lending to such a highly indebted government. that leaves option 3. as the only viable course of action (viable that is, from the PoV of politicians). Then the yen will reverse course (actually, it will probably reverse course in advance of the actual crossing of the Rubicon). On Sat, Nov 6, 2010 at 3:47 AM, M wrote: Martin Armstrong is projecting that the Yen can go to 65 to the USD by June 2011, at which point we'll get a cycle turn. Looks like we could well get there as it continues within its current channel. Note that the Yen made an all-time high (strength-wise) on a monthly closing basis vs. the USD in October. Good article by Gillian Tett, in case you missed it.... ft.com