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

To: Real Man who wrote (51002)

4/10/2013 11:36:33 PM

From: ggersh

1 Recommendation Read Replies (1) | Respond to of 71463

Might be more to it than front running, liquidity
here there and everywhere, makes liquidity meaningless????

What's one man's inflation is anothers deflation????

From: heinz44	4/10/2013 10:16:25 PM
	1 Recommendation of 110025

Gold Chart by Request Here's a look at the latest after today's sharp selloff in gold. Note that the metal is approaching the support zone which has held it for some time now. You can see that the former support zone between approximately $1592 - $1588 or so, turned into a resistance zone and attracted selling yesterday when gold failed to extend past it and back to $1600. Central Bank buying out of Asia has been attracted to the metal on approaches to this lower support zone in time past. We will have to wait and see if that buying materializes again. One thing I find quite ironic. Let me mention it and see if you do also. The Bank of Japan, has adopted the policy of its new Prime Minister whose stated goal when he ran for election was to deliberately produce a 2% inflation rate. That was for the express purpose of getting the Japanese economy out of the deflationary trap which has snared it for decades now. When you really examine that policy, all it essentially consists of is massive buying of all maturity ranges of Japanese government debt, along with some targeted buying of certain ETF's and some other financial assets. The scope and the size of this buying has various estimates that I have seen but it looks to be in the neighborhood of (US) $1.4 Trillion or so. What is the methodology to induce inflation when we cut to the chase? Simple - drive the currency lower pushing the costs of imported goods higher while making Japanese goods much more competitive on the global market. Also, keep interest rates artificially at such extremely low levels that it spurs borrowing and thus consumption. What has been the result for gold priced in terms of the Yen? Answer - it shot up to an all time high just yesterday. Now turn your attention to the US here. What is the policy of the Federal Reserve? Buy enough government bonds to keep interest rates, both short and long term, artificially low in order to spur borrowing and thus consumption. Somehow this is supposed to produce inflation in Japan without it being inflationary here.