Ben Davies: The Japanese Monetary Earthquake! Let’s Say Gold Went to $13,000!
- For those of you who follow the precious metal market, you have to read Ben Davies’ articles. The guy has unusual but very sound perspective. Here is what he writes in:
The World Monetary Earthquake – The Dash From Cash
Within a single week 25 nations have deliberately slashed the values of their currencies. Nothing quite comparable with this has ever happened before in the history of the world. This world monetary earthquake will carry many lessons.
….. click on link to read the rest.
- I encourage all of you to read the entire research paper. It is very well written, logical and provides sound arguments. Monetary economics will be so boring without people like Ben Davies.
- The recent steps by the BOJ is a monetary earthquake. The corporate MSM has still not picked up on its significance. It is clear: the Japanese are going on the QE route massively to stem the rise of the Yen. They are, however, not successful so far. The USD-JPY has hit the 81.x handle.
- Currency debasement, a beggar thy neighbour policy, is getting politically very sensitive. The US government is accusing China of being a currency manipulator. But what about the other 25 countries (including Japan) that have intervene in the forex market? For Japan their economy is tanking because of the strong Yen. I suspect that at some point in time, to sidestep the accusation of being a currency manipulator, the Japanese government will revalue the price of gold in Yen much higher. Ie. they will go into the market to buy up gold with their (electronically created out of thin air) Yen.
- This amounts to a devaluation of the Yen against gold. It is a devaluation of the Yen against all currencies. BY doing this, they will sidestep accusations of being a currency manipulator. (Thanks to the excellent KingWorldNews.com)
Ben Davies – Let’s Say Gold Went to $13,000
Talk of a secret Sino-French pact to push other G10 countries towards a possible currency coordination, echoing the Louvre Accord of 1987, is rife. Big deal, it may be, but the real news is out of Japan. They have not only eased monetary conditions, but they have lit the fuse to a full scale monetary explosion. Endaka Fukyo (円高不況) to you Mr Yankee and you Mr China. We pass the bucks back to you. They have just unleashed the potential for ‘unlimited’ monetisation to try and reinvigorate their economy and push the horns of the ‘Impossible Trinity’ firmly up the backside of the US and China. “Do unto thee what you do to us”; the name of game when it comes to current account politics.
….click on link to read the rest.
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