HomepageAbout AuthorNewsletterChartsContact UsArchive
 
Subscribe Now
Subscribe to the Global Money Trends newsletter - to learn about the hidden and most powerful forces that are moving the world's foreign currency, commodities, precious metals, interest rate, and stock markets, - illustrated with the most insightful, unique, and hard-to-get charts in cyberspace, - and utilized by traders to identify the Mega-Trends that can lead to Mega-Profits.
 
There's expert analysis of the latest "hot news" and spotlights on the manipulative antics of central bankers moving markets.  As an extra bonus, a subscription includes bi-weekly Audio Broadcasts, - a great value for only $135 per year. It's published on Friday after the NYSE close. The articles posted below provide a small glimpse of what's available to subscribers.
 
You can subscribe to Global Money Trends, by phone, at 561-391-8008, Sunday - Friday, 9-am to 9-pm EST
 
  

Analysis and Charts of Global Markets

written by Gary Dorsch, Editor and Publisher
How high Can the US$ Fly versus the Japanese Yen?
May 13, 2013
The Wise Sages of Ancient days used to say, “The fate of a Liar, is that nobody believes him, - even when he’s speaking the truth!” Such is the case for Japan’s propaganda artists, including the Prime Minister, the Finance minister, and central bank chief, who are all trying to cover-up their boldest scheme yet, to crush the value of the Japanese yen, against the currencies of its major trading partners. On May 11th, the finance chiefs of the Group of Seven (G-7) gave Tokyo the green light to continue with its radical QE scheme, which has already led to a -24% devaluation of the yen against the US-dollar, and a -33% devaluation against the Euro, since market savvy traders first got wind of the plot in late November.
Shale Oil is a Big Game Changer for Dow-to-Gold Ratio
Apr 16, 2013
Since mid-November, the market value of the Dow Jones Industrials – compared to the price of Gold (the Dow-to-Gold ratio), was moving steadily higher. Traders figure the best way to profit from the Fed’s QE-schemes, is through purchasing US-stock market index futures and ETF’s. Today, 1-share of the Dow Jones Industrials can fetch 10.7-ounces of Gold, compared with only 7.35-ounes last November. Given that the Dow peaked at 42-oz’s of Gold in 1999, there’s still plenty of room for the Dow to regain lost ground against the yellow metal. When speaking of the Dow-to-Gold Ratio, - no matter which way the wind blows on Wall Street, the Dow is likely to gain further ground compared to the price of Gold.
Dealing with QE-Wars and Currency Devaluations
Mar 20, 2013
What’s most urgent right now, is learning how to profit from the QE-Wars and competitive currency devaluations that have become the “New Normal” of in today’s marketplace. And as long as governments’ budget deficits continue to spiral out of control, presumably, there’s no end in sight to how much currency that central banks will print, or how much politicians will try to tax. A key question facing investors is - what is the best strategy for staying ahead of the money printing schemes and currency devaluations that are expected to unfold in the year ahead?
No End in Sight for Global “Currency Wars”
Feb 14, 2013
A January 16th warning issued by Russia’s central banker Alexei Ulyukayev has also set the narrative for the G-20 meeting. “The world is on the brink of a fresh “currency war.” Japan is weakening the yen and other countries may follow. If Japan continues to pursue a softer currency, reciprocal devaluations would hurt the global economy,” Ulyukayev warned. “We’re on a threshold of very serious and confrontational actions. The new government of Japan is a course towards a very protectionist monetary policy through a sharp depreciation of the yen. Other colleagues from respected central banks and governments already pursue this policy. This is not a path towards global coordination but rather a separation,” Ulyukayev declared.
Australia’s Metal Miners hitch a Ride to China’s Economy
Jan 23, 2013
It used to be said that when the US-economy caught a cold, the rest of the world caught pneumonia. However, this is no longer the case. While it’s still the world’s biggest economy, the US-economy is not very important any longer for Australia. Instead, Australia’s fortunes have become increasingly linked to China’s. The view that Australia’s economy might actually have become “coupled” with China’s began to gain credibility in 2001.
 
To view more articles click on Archive
 
Tokyo’s “shock and awe,” - Double Japan’s monetary base to ¥270-trillion in two years
Updated 9:27 PM, May-13, Mon
On May 9th, the US-dollar’s exchange rate rose above the key threshold of ¥100 for the first time in 4-½-years, extending a +30% surge since mid November. The US-dollar’s advance didn´t stop at ¥100, - it quickly surged to ¥102 the next day. The sharp move is just the latest episode in the mad scramble to dump the Japanese yen – as the BoJ unleashes its most radical scheme ever - “Big Bang” QE - designed to crush the yen’s exchange rate. It’s already dragged the Bank of Australia and the Bank of Korea into a regional currency war with Tokyo, with the Asian central banks cutting their loan rates last week, and hinting at more to come, trying to cap the rise of the Aussie dollar and the Korean won against the yen. ----------------- Tokyo’s “shock and awe,” - would double Japan’s monetary base from ¥135-trillion ($US1.4-trillion) to ¥270-trillion in two years. This will be achieved by stepped-up purchases of long-term government bonds (JGB’s) , and lifting the average maturity of its holdings from three to seven years. The BoJ will buy ¥7-trillion of JGB’s per month, - the equivalent of 1% of gross domestic product (GDP) every month for the remainder of 2013, and 1.1% per month in 2014. Given that Japan’s economy is one-third of the size of the US’s, the scope of Japan’s QE scheme is three times more potent than the Fed’s QE scheme. ------------------------ Publicly, Tokyo insists that its radical scheme to double in the basic Japanese money supply over a period of 21-months is purely about trying to end two decades of prolonged deflation. Apparently, none of the G-7 finance chiefs criticized the BoJ’s monetary easing or the yen’s sharp devaluation, during the May 11th gathering - “Japan’s stance is gaining broader understanding,” Finance chief Taro Aso said at a joint press conference. “The BoJ isn’t targeting currency rates, which are determined by the markets,” added BoJ chief Haruhiko Kuroda. In Tokyo, Japanese PM Shinzo Abe added, “I’m not in a position to comment on an appropriate currency level. Basically, our policies are not aimed at weakening the yen. Various factors are behind exchange-rate moves. Among them, monetary policy plays a major one.” But he added “the BoJ´s policy steps could indirectly result in a weaker yen and boost share prices, and help to lift corporate earnings,” Abe declared. -------------------- ---Here’s Tokyo’s sleight of hand, - a devaluation of a currency, whether deliberate or just a side-effect of QE, is still a tactical devaluation. The goal of Japan’s monetary policy is quite simple - boost the market value of the Nikkei-225 and Topix indexes by weakening the yen’s exchange rate. As noted in the Wall Street Journal, “The G-20 communiqué offered a message that “countries can continue to devalue their currencies so long as they don’t explicitly say they want to devalue their currencies. This contradiction between economic word and deed shows the degree to which policymakers have defaulted to easy money as the engine of growth. The rest is commentary,” the WSJ’s editors wrote. ------------------ “This monetary easing is in an entirely new dimension,” the newly installed BoJ chief Haruhiko Kuroda declared, following the bank’s April 4th decision. Kuroda emphasized the break with history, repeatedly pointing to a graph showing the planned jump in the country’s monetary base. “Incremental steps of the kind we’ve seen so far weren’t going to get us out of deflation. I’m certain we have now adopted all policies we can think of to meet the +2% price inflation target. And if prices did not rise as expected, the BoJ would not hesitate to step up the easing program,” Mr Kuroda warned. This radical stance represents a big sea change from his predecessors, who were faulted for being too ready to pull back from QE. ------------ Since Nov ’12, Japan’s monetary base has soared +11% to a record ¥150-trillion, and now stands +23% higher than a year ago. This time, nobody expects the latest increase in the money supply to be temporary or rolled back. The BoJ says it will increase the monetary base until it reaches a whopping ¥270-trillion. In turn, the tsunami of excess liquidity flowing from Tokyo is expected to crush the value of the Japanese yen against its trading partners, while fueling bubbles in global stock markets, via the infamous “Yen Carry” trade, which could grow in size to more than $1-trillion of highly leverage bets.
Archived Comments:
Tokyo’s “shock and awe,” - Double Japan’s monetary base to ¥270-trillion in two years
BoJ aims to fuel Inflation by Crushing the Yen, - Risk of big Jump in Japanese bond Yields
Updated 9:32 PM, May-13, Mon
Crushing the value of the yen is about the only mechanism that Tokyo has readily available in order to boost Japan’s inflation rate to +2%. That’s a pretty tall order, since Tokyo massages its inflation data, and uses fuzzy math to calculate its cost of living index. The methodology is completely under the control of Tokyo’s financial warlords, and the inflation data is routinely rigged to show a perpetual pattern of deflation. Last week, Japan said its consumer price index was -0.9% lower in April, compared with a year earlier. ------------------- BoJ chief sounded confident on May 11th that the central bank could prevent an upward spike in Japanese bond yields. “I do not expect a sudden spike in long-term bond yields. In the long-run, if the economy recovers and inflation heads towards +2%, we might see nominal interest rates rise but that’s natural.” The rigging of Japan´s CPI data is to be expected, so JGB traders should only trust the actual prices in the global commodity markets for real-time clues about the future direction of inflation, and not rely on doctored-up government statistics. --------------------- Despite Kuroda’s belief that the BoJ can easily continue to manhandle Japan’s $10.5-trillion government bond (JGB), some market investors are starting to question the wisdom of owning ultra-low yielding JGB’s. On May 13th, ten-year JGB futures price posted its biggest two-day drop in 2-½-years, and skidded to a 1-year low. The Tokyo Stock Exchange briefly suspended JGB trading as a circuit breaker was triggered. The 10-year cash bond yield shot upwards to as high as 0.80%, extending its biggest surge in 5-years. --------------------------- JGB yields initially plunged in a knee-jerk reaction to a historic low of 0.315% upon hearing the details of the BoJ’s scheme to purchase of ¥7.5-trillion of JGB’s each month, which might lead to a scarcity of bonds. But it did not take a single day for the market to reverse course. The 10-year yield is now more than 2.5-times as high as it record low of 0.315% hit on April 4th. As part of its two-year Big-bang QE, the BoJ bought ¥1.2-trillion of bonds on May 13th, but that failed to stop the uptick in JGB yields to 0.80%. Still, for Nikkei bulls, - there’s no need to panic - as the 10-year yield is still comfortably below 1%. ----------------------------- How long can Tokyo’s financial warlords continue brainwash the Japanese public into believing that the bogeyman of deflation is still haunting its economy? No doubt, MoF apparatchiks will continue to fudge the official inflation numbers. However, the truth is, - the Continuous Commodity Index, measuring the cost of a basket of 17-equally weighted commodities, is now trading +26% higher than a year ago, when priced in yen. A further weakening of the yen would only increase the cost of imported goods for Japanese consumers. Already, the cost for imported fossil fuels jumped +10% last year to ¥24-trillion, even before the US$ crossed ¥90. Be careful of what you wish for, since a higher cost of living can sap the disposable income of your citizens, and lift JGB yields, which in turn, can also cause an economic recession.
Archived Comments:
BoJ aims to fuel Inflation by Crushing the Yen, - Risk of big Jump in Japanese bond Yields
  
How high can US$ fly, versus Yen, before BoJ Intervenes?
Updated 9:35 PM, May-13, Mon
The Wise Sages of Ancient days used to say, “The fate of a Liar, is that nobody believes him, - even when he’s speaking the truth!” Such is the case for Japan’s propaganda artists, including the Prime Minister, the Finance minister, and central bank chief, who are all trying to cover-up their boldest scheme yet, to crush the value of the Japanese yen, against the currencies of its major trading partners. On May 11th, the finance chiefs of the Group of Seven (G-7) gave Tokyo the green light to continue with its radical QE scheme, which has already led to a -24% devaluation of the yen against the US-dollar, and a -33% devaluation against the Euro, since market savvy traders first got wind of the plot in late November. ------------------------- In an age when ruling coalitions of every political stripe distort the truth to promote their self interests, it’s hardly surprising that Japan’s ruling LDP party is steadfastly denying that it’s engaging in a “beggar thy neighbor” devaluation of its currency. By the same token, Tokyo’s fraudulent claim that its economy is still plagued by a negative rate of inflation (deflation), is so wildly at odds with reality that it’s routinely regarded with cynicism and disbelief. -------------------------- How high can US$ fly, versus Yen, before BoJ Intervenes? If the yen begins to plummet into a free-fall, Japan’s competitors in China, Germany, Korea and the US might cry foul and demand that Tokyo either scale back its Big-bang QE operations or stop them completely. Otherwise, other central banks might push back against Tokyo in a full scale currency war, the likes of which, the world has never seen before. However, Tokyo is confident it can prevent a free-fall of the yen, and that it can carefully orchestrate a gradual devaluation, with verbal Jawboning exercises and utilizing its enormous war chest of foreign currency reserves, now totaling $1.26-trillion, and mostly consisting of US-dollars. ------------------------------ Although Japan is supposed to refrain from using its FX reserves for purposes of direct intervention in the currency markets, according to the Feb 12th G-20 communiqué, the renegade BoJ is expected to begin clandestine sales of US-dollars at higher levels, in order to keep a two-way market intact, and prevent a currency free-fall. Where would Tokyo try to cap the US-dollar’s advance? On January 18th, Koichi Hamada, the chief architect of “Abenomics,” gave a subtle hint to reporters at the Foreign Correspondents’ Club of Japan in Tokyo, saying the US-dollar can rise to ¥110 before excessive inflation risks kick in. “If the dollar goes above ¥110, there may be reason for worry, but at ¥100 or ¥95, it’s OK.”
Archived Comments:
How high can US$ fly, versus Yen, before BoJ Intervenes?
 

Global Money Trends
Audio Broadcasts

Audio Broadcasts are uploaded Monday and Wednesday evenings, to our subscriber section, with the latest news and analysis moving markets

   microphone
 

Subscribe to 48-issues of the Global Money Trends newsletter, for $135 per year. The newsletter is 15-to-20 pages in length, and is published on Friday afternoons, about 2-hours after the NYSE closing bell, designed for an enjoyable weekend read. 

After subscribing, we will e-mail a receipt, a user-name, and a password to your mailbox within 48-hours, in order to gain access to the Log-In area, located at the upper right corner of this home page To ORDER NOW: Call phone # 561-391-8008, Sunday thru Friday, 9 am to 9 pm EST.

 

Privacy Policy    Disclaimer & Copyright   Troubleshooting    Archive
Copyright ©2005 - 2010 SirChartsAlot, Inc All rights reserved. 
Developed by Binamica - Web design in Israel