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Ira as you know better then most virtually everytime you a
see a sky is falling scenario in the financial markets it (1) always seems so
plausible (2) never happens.
The Japanese have thrown their own domestic money market
into a tailspin. The demand for money in Japan can no longer be financed by
selling Japanese Treasuries as rates at both ends of the curve, but especially
the short end, have risen quite a lot. This was just based on the demand
for money for FX intervention. As well the US has
formally requested the Japanese stop intervention in the FX market.
For these reasons as well as Japanese repatriation
flows expect to see a sharp curtailment of the Japanese involvement.
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
mr.ira
To: <A title=Undisclosed-Recipient:;
href="">Undisclosed-Recipient:;
Sent: Sunday, March 21, 2004 12:21
AM
Subject: [RT] gold, yen, dollar and
inflation.
Here is another opinion on what is happening in
the markets. He is also looking at inflation or stagflation and its
effect up0on the markets.
<FONT
class=ART_TITLE>Saturday, March 20,
2004, 5:53:00 PM EST<IMG height=5
src="gif00079.gif" width=1
border=0>Gold
Community Heads Up<IMG height=5
src="gif00079.gif" width=1
border=0><FONT
class=ART_DATE> Author: Jim
Sinclair<IMG height=5
src="gif00079.gif" width=1
border=0>
<TABLE cellSpacing=0 cellPadding=0 width="100%" bgColor=#999999
border=0>
Japanese Authorities May Cease
Yen-Selling Interventions Informed
discussions in Japan concerning the possibility that the Bank of
Japan (BOJ) might cease intervention in the yen is being seen in
the currency trading fraternity as a possible trap for the dollar
bears in terms of the yen.
However, reports of these discussions
lend credence to my sources who argue that the Federal Reserve is
scared to death of a potential inflationary price explosion caused
by Japanese market intervention.
The real purpose for that intervention
is nothing less than keeping the world's equity markets intact by
flooding it with liquidity via the purchase of all the dollars
raised in this process under the management of the NY Federal
Reserve Bank. I do not believe the BOJ can simply
walk away from intervention so my feeling is there will be some
technically-timed intervention by the BOJ in the dollar/yen
equation. Nonetheless, the use of this dangerous “Made in Japan”
Bernanke Electronic Money Printing Press has run its course. The
damage has been done. It will take generations to set this
right.
A deceleration in the use of this
Japanese monetary experiment at the request of the Federal Reserve
now places the world's equity and bond markets in potential
jeopardy, setting up the probability of Stagflation and the
inclusion of inflation into the weak dollar
equation. All that being said, I am changing my
strategy in gold and suggesting you do the same. Having bought
correctly and made some sales into strength, I will now hold the
balance of my position, adding to it on any price weakness but not
making any further sells at these levels.
If gold chops down in this breakout
phase, I will simply go to a full long position according to my
means and risk acceptance. I might consider a "Texas Spread" in
gold if the price is right over the next week .
The impact of running up historically
huge dollar amounts of intervention and splashing it willy-nilly
into the bond market to maintain a false interest rate and
then falling away hard from that volume will push gold to
significantly higher prices in my opinion. We will
still buy weakness and sell strength but the major change is that
we want a better price on the sells.
I'll keep you
posted.
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