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drbubb

CURRENCY WARS - First, a major Yen decline

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Interesting.

Do you have any charts to back up those points ?

 

THESE charts (by Goldfinger / see also: thread ) might help:

 

http://gold.approxim...lver_watch.html

UK_House_Prices_in_Gold_LOG_GUESS.png

http://gold.approxim...es_RPI-adj.html

UK_House_Prices_RPI-adj.png

/source: post#4642 : http://www.greenener...ic=4058&st=4640

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Also, here's Gold-in-FXY (Yen) - back testing the Highs

 

goldinfxy.png

 

Could be toppy, if the Yen (to USD) reverses to the upside from Y110

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Hong Kong mistaken in backing dollar peg

 

Asia Times Online - ‎Jan 16, 2013‎

Efforts by the Hong Kong Monetary Authority to hold down the value of the local currency compared with the US dollar, backed by the injection of almost US$14 billion since October 19, are doomed to fail - and hedge-fund investor William Ackman is ...

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Yen hovers near 31-month low vs dollar before BoJ meeting

Reuters - 4 Hours ago

. Credit: Reuters/Toshiyuki Aizawa By NEW YORK | Fri Jan 18, 2013 10:23am EST NEW YORK (Reuters) - The yen dropped for a second straight day against the dollar on Friday, trading within striking distance

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Yen rallies - Japanese stocks drop...

 

Nikkei 225 Falls Most in Two Weeks as Yen Rises on BOJ

BusinessWeek - 43 Minutes ago

Japan shares declined, with the Nikkei 225 Stock Average (NKY) heading for its biggest drop in two weeks, as the yen strengthened after the Bank of Japan (8301) yesterday said it will wait a year to add open-ended stimulus...

 

Also, the BofJ does not like Abe's blunt style, pushing the exchange rate, endangering their independence

 

FXY : 110.49 +1.61/ +1.48%

EWJ : $9.77 -0.095 / - 0.96% (Japan stock etf, yesterday in NY)

 

The yen will not fall in a straight line, so an upwards correction was inevitable

 

The inevitable rally started from FXY: 108.75

 

Gold in FXY got up to $15.57, above the prior high

Here's a chart from above, showing the "old" high at $15.16

Also, here's Gold-in-FXY (Yen) - back testing the Highs

 

goldinfxy.png

 

Could be toppy, if the Yen (to USD) reverses to the upside from Y110

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British Pound to $0.90 !?

 

FXB / British Pound ... Alldata : 5yrsWk : 2yrsD : 6mos : 10d

 

fxb.gif

 

This comment is pretty bearish, if it proves accurate:

 

British Pound Breakdown Imminent, Downside Target 90!

(01/28/13)

 

After 4-5 years of sideways consolidation, the British Pound appears SET TO BREAKDOWN and complete a long term coiling pattern.

This process is set to end at precisely the same time that a new intermediate term bearish trend signal is poised to trigger.

The long term (several years) measured target from a successful breakdown here is 90 (currently around 160).

 

It is important to note that at this time we have neither broken down, nor have we triggered a new intermediate bearish trend signal....yet.

That technical confirmation could come as soon as tomorrow however given that other indicators that we follow that have already given way to a bearish break.

 

Paul Thomason, Elliott Wave Market Service

 

(I reckon that a meaningful break of $1.55 may do it !)

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I tend to agree that Y105 is important. / Chart-FXY

As the chart will show, the price is already very close to Y105.

 

But I think that Y100 is even more so.

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They've been successfully blaming deflation for the woes of the Japanese economy for the last decade, but if they think that's bad then wait until they they a whiff of the the inflation that will come about through a currency collapse.

 

Can't say this hasn't been coming.

The markets were surely irrational for the longest time, but now they've decided that enough is enough.

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Hedge Fund manager Kyle Bass predicts USDJPY at 200 within 24 months:

 

http://www.cnbc.com/id/100391704

http://www.forbes.com/sites/stephenharner/2013/01/21/whither-japan-stocks-and-bonds-are-kyle-bass-and-martin-feldstein-right-is-market-collapse-ahead/

 

He also sees this as the start of the global currency war as everyone seeks to devalue their currency.

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Yen hits near three-year low as new Bank of Japan governor eyed

Reuters - ‎1 hour ago‎

By Marc Jones. LONDON | Wed Feb 6, 2013

LONDON (Reuters) - The yen fell close to a three-year low on Wednesday on expectations that a new Bank of Japan governor could ease policy, while the euro was steady and European shares ...

 

 

Meantime, Gold-in-Yen keeps climbing

 

goldinyen.png

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NOT EVERYONE is Bearish on the yen (My target remains 100)

 

Unsurprisingly, USD’s chief rival, the Euro is in an inverted and bullish H&S. We have been targeting 142 in NFTRH since the break above the neckline. The Euro appears to be attracting a ‘long Euro/short Yen and gold’ momentum (read: hedge funds) crowd playing the opposite game to that from mid 2011 when Yen and Gold rose strongly in reaction to the Euro crisis.

43.png

Yen has been played to the hilt by the hedgies. We have had 106 as the downside target since the neckline to the massive H&S broke down. Yen could be a heck of a contrarian play for a counter trend rally, as the short-covering should be massive.

===

/see: http://www.kitco.com...n/20130201.html

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Currency Wars

 

Gold-in-Yen has climbed to new Highs, as the yen fell towards 100

 

goldinyen.png

 

Which currency will get hit next?

 

Here's Gold-in-FXB (Sterling)

 

goldinfxb.png

 

If Sterling stays weak, then Gold-in-Sterling may soon hit fresh highs

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Currency Headlines

 

Euro plunges on ECB Draghi's currency comment, economic risk

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SHIFTING Currency Wars

 

Euro near two-week low, shares up on rekindled rate cut hopes

Reuters - ‎8 minutes ago

Feb 8, 2013 / LONDON (Reuters) - European shares rose and the euro hovered near a two-week low on Friday after the European Central Bank rekindled expectations that it could cut interest rates again.

 

 

Aso Says Pace of Yen Decline Too Fast With G-20 Set to Meet

Bloomberg - ‎11 minutes ago‎

Japanese Finance Minister Taro Aso said the pace of the yen's weakening has been too fast, speaking a week before a meeting of global finance chiefs where Japan's currency stance is forecast to be an issue.

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The notion of a weak currency being good for you is yet more NeoClassical absurdity that only a Keynesian could believe. If a weak currency can boost your economy, let us apply reductio ad absurdism and consider the implications of fully devaluing you currency so that it is worthless. Clearly your country has no purchasing power whatsoever. Can you say Zimbabwe?

OTOH consider if your currency has infinite value; you could purchase the rest of the world's good and still have change left over.

 

The way to destroy these Keynesian arguments is always to apply the extremity situation to arrive at the logical conclusion to the basis of their argument. Doing this you can destroy the logic of their policies and expose their destructive and counterintuitive policies.

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The notion of a weak currency being good for you is yet more NeoClassical absurdity that only a Keynesian could believe. If a weak currency can boost your economy, let us apply reductio ad absurdism and consider the implications of fully devaluing you currency so that it is worthless. Clearly your country has no purchasing power whatsoever. Can you say Zimbabwe?

OTOH consider if your currency has infinite value; you could purchase the rest of the world's good and still have change left over.

 

When economists want a 'weaker' currency, they mean this in a relative sense, that is, relative to other currencies. It may not be considered 'good for you' as an international man of money but it is 'good for the [specific] economy', which are what economists generally have in mind [but then I see a false dichotomy there and see the two as inter-connected]. The last thing they want is a 'strong' currency [relative to others]. Of course, what they should be aiming for is balance of trade and stable currencies.

 

The way to destroy these Keynesian arguments is always to apply the extremity situation to arrive at the logical conclusion to the basis of their argument. Doing this you can destroy the logic of their policies and expose their destructive and counterintuitive policies.

 

It simply is not a matter for pure theory/ logic, but more to do with real world relations and practical reason. Money is primarily a practical thing, and can not be overly theorized.

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When economists want a 'weaker' currency, they mean this in a relative sense, that is, relative to other currencies. The last thing they want is a 'strong' currency [relative to others].

 

 

 

It simply is not a matter for pure theory/ logic, but more to do with practical reason. Money is primarily a practical thing, and can not be overly theorized.

 

 

Why is a weak currency helpful? Because it boost exports? But it also makes your imports more expensive. Zero sum game. Actually, negative sum game for anyone running a trade deficit. The economist who only sees the visible effects of their policy without considering the unseen effects is no economist at all.

 

Always rediculous how, again, the neoclassicals can dismiss something because they say the real world is not theory, but if it doesn't work in theory then how can it work in practice? All they have to hide behind is the sheer size of the real world to mask their destructive policies.

 

The idea that a Keynesian system is more productive for a island of 10 people where 4 of them tell the other 6 what to do and pay themselves out of the produce of those other members is patently absurd, yet the Keynesians believe that simply by scaling up the number of participants then somehow their theory will eventually work. Well if that is the case, then extrapolating the core of their argument, the logical conclusion is that an economy with an infinite number of individuals must require 100% central planning in order to maximize output. Who believes that? I challenge any Keynesian to tell me where the line is that the model stops working and the real world somehow takes over.

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Why is a weak currency helpful? Because it boost exports? But it also makes your imports more expensive. Zero sum game. Actually, negative sum game for anyone running a trade deficit. The economist who only sees the visible effects of their policy without considering the unseen effects is no economist at all.

 

Always rediculous how, again, the neoclassicals can dismiss something because they say the real world is not theory, but if it doesn't work in theory then how can it work in practice? All they have to hide behind is the sheer size of the real world to mask their destructive policies.

 

The idea that a Keynesian system is more productive for a island of 10 people where 4 of them tell the other 6 what to do and pay themselves out of the produce of those other members is patently absurd, yet the Keynesians believe that simply by scaling up the number of participants then somehow their theory will eventually work. Well if that is the case, then extrapolating the core of their argument, the logical conclusion is that an economy with an infinite number of individuals must require 100% central planning in order to maximize output. Who believes that? I challenge any Keynesian to tell me where the line is that the model stops working and the real world somehow takes over.

 

Keynesians, neoclassicists, Austrians etc are all just ideological labels. Economics is not like geometry or mathematics with abstract a priori truths - it's unfortunate that many professionally trained academic economists have thought it is in their desire to make economics a 'respectable' science. No, economics is simply rooted in human behaviour - observation and experience should shape economic thought that is primarily pragmatic. It's the same case with politics. No wonder economics was originally known as Political Economy. Unfortunately, the idea of 'pure science' has contaminated all of us today.

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Venezuela's dramatic 45% devaluation is really a first big shot in the Currency War

 

...the US Federal Reserve, the Swiss National Bank, the Bank of Japan, the Central Bank of Brazil, and the People's Bank of China, all of whom have been very interested in the relative valuation of their currencies. And this is a list that matters because three of the top five global currencies are represented on that list and all of them have been engaged in competitive devaluations of their currency in order to promote their own exports.

This form of international contest, he continues, should strike those with a sense of history as similar to the trade and tariff wars of the Depression Era 1930's: “beggaring thy neighbor” in order to extract one's own country from economic straits. In the 1930's, the “beggaring” took the form of either abandoning the gold standard, literally blocking the importation of foreign goods, or imposing tariffs so high that imports were effectively blocked.

This time around, he warns, there are no gold standards to abandon and international trade rules have become too ingrained, both economically and legally, for onerous tariffs or outright bans to be practical or legal. Thus, the only economic weapon left is that of currency devaluation.

===

/more: http://nesaranews.bl...us-economy.html

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The dollar is drifting sideways

 

DXY / US Dollar etf ... update

 

dxy.gif

 

...But Jim Willie is already celebrating its demise

 

Friend of gold Jim Sinclair, and executive to a mining firm with interests in Tanzania, put it so well. He captures the theme of this article when he said, “It is the constant drop in the dollar’s usage as a contract mechanism internationally. No one sees this but it is the Hammer of Thor on the head of the dollar.” The rejection of the USDollar in global trade will mean the end of the abused privilege in a currency turned toxic. Its rejection is the marquee event in the financial world for 2013, following isolation. It is unstoppable and all-encompassing, certain to have geopolitical consequences, as it alters the economic and financial landscape in harsh ways much like a band of violent marauders brandishing machetes alter the neckline of their victims. See the Tonton Macoute in Haiti. The greenback is cornered; it is done!

===

/more: http://www.silverdoc...ection-in-2013/

 

The dollar's weakness does not show up in the DXY measure because the currencies in the DXY basket (Euro, Yen, Sterling, etc are also mostly weak). Measured against the Chinese currency it looks weaker

 

Three Majors vs USD ... update

fxeetc.gif

 

Three Others vs USD ... update

cnyetc.gif

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WSJ : Soros wins another BIllion $

 

Story iin today's WSJ, says that George Soros has made at least $1 billion since November speculating against the yen

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Published on Feb 17, 2013

Stuart Wilde with Gerald Celente talking about the currency wars, and possible global wars and the price of gold.

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