Historical Precedent To Predict The Success Rate Of The G7 Yen Devaluation "Accord"

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Fri, 03/18/2011 - 09:37 | 1070940 ziggy59
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(second time admitting intervention) NY Fed confirms intervention in currency markets




Fri, 03/18/2011 - 09:38 | 1070946 midz
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The Honda Accord.

Fri, 03/18/2011 - 09:41 | 1070954 dick cheneys ghost
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Fri, 03/18/2011 - 09:41 | 1070958 Cursive
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Seconded. :-)

Fri, 03/18/2011 - 09:41 | 1070969 4xaddict
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+1 awesome!


Fri, 03/18/2011 - 09:52 | 1070976 iota
iota's picture

Yours for just $5bln down and 36 monthly payments of several millions.

Fri, 03/18/2011 - 10:01 | 1071054 nevadan
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I love this website!

Fri, 03/18/2011 - 10:20 | 1071172 falak pema
falak pema's picture

How about the Mata Hari accord. If this is a false flag operation in the interests of some unknown Fu Man Chu. (You know whom I mean...'cos I don't! But that's irrelevant to the issue like in all cloak and dagger games. Just as long as there is a villain we'll always find a hero or vice-versa! Especially if Mata Hari is played by Angelina Jolie, box office guaranteed!)

Fri, 03/18/2011 - 09:38 | 1070948 forexskin
forexskin's picture

ummmmm, stop the printing presses?


ben - hello, bennnyyyyy are you there?

Fri, 03/18/2011 - 09:39 | 1070950 Elmer T Pudd
Elmer T Pudd's picture

They do this every day anyway.  The recent G7 Meeting was just a time out to adjust a new offense to a failed defense.

Fri, 03/18/2011 - 09:39 | 1070955 Dr. No
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The biggest supporter of a weak Yen is the US.  If the Yen continues to strengthen, Japan will consider liquidating their treasuries.  Once liquidated (to the FED Pomo) and US dollar cash in hand, Japan will begin to purchase goods, services, and commodities with these dollars. 

Mr. Timmah is sweating right now.

Fri, 03/18/2011 - 10:23 | 1071187 MachoMan
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If they were going to liquidate treasuries, why would they not have done so already?  Wouldn't it be dollar bullish in the immediate term and any unspent dollars would counteract any attempt at yen devaluation?  If this would not trigger a treasury sale, what will?  Further, what would a commodity grab do to an export model, at least in the short-medium term?

It seems to me that there is a concerted effort NOT to sell treasuries...  why does China come out of hiding and all of a sudden display its massive treasury holdings after months of pretending to sell?  Seems like a rock and a hard place for export countries.

Fri, 03/18/2011 - 09:41 | 1070961 John Law Lives
Fri, 03/18/2011 - 09:40 | 1070964 RobotTrader
RobotTrader's picture

Who would have thought that the Plutocrats would have been able to pull off:

- Libya Ceasefire

- Restore power to nuclear reactors

- Smash oil prices

- Rally bank stocks with dividend rumors

- Destroy the Yen after an epic chart breakout

In one fell swoop?

Man, these guys are good.

Proof that "Paper" can solve almost any crisis.


Fri, 03/18/2011 - 09:46 | 1070989 Cursive
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@ Robot

Lulz. Neville Chamberlain.

Fri, 03/18/2011 - 09:49 | 1071002 cossack55
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I know for a fact it helps ease crises in my bathroom on a daily basis.

Fri, 03/18/2011 - 09:55 | 1071021 Dr. Richard Head
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"Proof that "Paper" can solve almost any crisis."

...until the next greater crisis comes along.  Bush's first stimulus plan had a life of what 4 years?  Obama's fiat ejaculations dried up pretty quick bringing in QE, QE 1.5, and QE2 all within two-three years. 

More money now equals less time purchased.  Place your bets accordingly.

Fri, 03/18/2011 - 09:57 | 1071029 Sophist Economicus
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Speaking of paper, Dollar futures knocking on 76 handle and USD/JPY elixir wearing off


Gonna be an interesting afternoon

Fri, 03/18/2011 - 09:41 | 1070966 wandstrasse
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back in the 80s the ratio real-economy vs financial-market was not as absurd as it is today. All the economic theories, rules, patterns, corelations do not apply any more.

Fri, 03/18/2011 - 09:42 | 1070972 Shock and Aweful
Shock and Aweful's picture

They don't get it...

Although these central planners think they have it all under control....me thinks that the world economy is just too big and complex to have all of the angles figured out...that there will always be some unanticpiated crisis or problem that arises out of manipulating markets like this.

There is no way for these G-7 fuck-tards to know for certain what pushing this financial button or that one will do - especially long term, for both their local and the world economies...they think they know...but they are really just acting out of blind desparation.  That is pretty obvious I would say.  No?

Fri, 03/18/2011 - 09:42 | 1070973 Bearster
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The difference between the 1980's dollar decline and the current yen spike is that in the 1980's, dollar-denominate credit was expanding faster than credit in other currencies, thus the declining value of dollars.  The current yen spike is not based on value, but based on an acute emergency driven demand for yen.  There's no question the dollar is going to zero, but there is equally no question the yen is going to zero.  Faster.

Fri, 03/18/2011 - 09:42 | 1070974 Cursive
Cursive's picture

Imagine a world where common weights and measures are changed daily by an international organization. That's how fucked up our money system is.

Fri, 03/18/2011 - 09:51 | 1071007 eftian
eftian's picture

Nice analogy

Fri, 03/18/2011 - 09:53 | 1071014 Internet Tough Guy
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They are playing 1980s games far too late. Central bankers are dinosaurs and will become extinct.

Fri, 03/18/2011 - 09:53 | 1071016 johnQpublic
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i havent gained weight, i've lost value.....?

Fri, 03/18/2011 - 10:17 | 1071156 Cursive
Cursive's picture

Shoe sizes? Fuggetaboutit. 6.5L eco-boost diesel engine? Maybe it is 6.5, but not your daddy's 6.5. That 100 GB SSD you're looking at? You'd hsve to check the date of manufacture to see what "100 GB" meant. FUBAR.

Fri, 03/18/2011 - 09:44 | 1070978 John Law Lives
John Law Lives's picture

Considering the internet bubble and subsequent collapse... and the housing bubble and subsequent collapse... we should have no doubt that the US Central Bank knows how to manage the economy.  They have a stellar track record.

Fri, 03/18/2011 - 09:43 | 1070980 Bull v. Bear
Bull v. Bear's picture

Yentervention bitchez...

Fri, 03/18/2011 - 09:45 | 1070981 LoneStarHog
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Since it was done by telephone, just call it Failsafe. Unfortunately, there was no high-pitch whine from all their phones, like in the movie.

Fri, 03/18/2011 - 09:44 | 1070987 Mae Kadoodie
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Robo, that's how captured markets work, right?

Fri, 03/18/2011 - 09:47 | 1070991 Jack Sheet
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Good complementary analysis by Peter Schiff here:


His expectation: Japan will eventually have to sell their  US treasuries

Fri, 03/18/2011 - 09:58 | 1071036 iota
iota's picture

"A stronger yen would aid in reducing rebuilding costs"

That's far too much common sense right there.

Fri, 03/18/2011 - 10:00 | 1071056 r101958
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Couldn't have said it better myself.

Fri, 03/18/2011 - 10:13 | 1071133 CitizenPete
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Schiff brings it all back to basic Austrian School economics and IMO he is usually spot on.  Timing is and issue and government interventions comming from all angles (and usually at the tip of a rifle) tend to warp and postpone the inevitable.  But IMO he is usually correct.


Humanity in any language - video of Japanese running from Tsnunami - I wonder what happened to the family of three?


Fri, 03/18/2011 - 09:48 | 1070994 cossack55
cossack55's picture

Since it involves Japan and current crisis:

The Half-Life Accord

Fri, 03/18/2011 - 09:48 | 1070998 iota
iota's picture

So at the current rate, they have about a week, possibly two before we're back to pre-intervention levels.

Fri, 03/18/2011 - 09:48 | 1070999 itiswhatitis
itiswhatitis's picture

The Hari Kari Accord

Fri, 03/18/2011 - 09:54 | 1071018 Janice
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Wonder what China thinks?  They are the 2nd largest debt holder and not in the G-7 club.

Fri, 03/18/2011 - 09:54 | 1071020 Tense INDIAN
Tense INDIAN's picture

so close to my TARGETS.:::



Fri, 03/18/2011 - 09:58 | 1071031 falak pema
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Their ability to control the currency war and make market forces bend to their wishes has as much chance of success as dropping water from buckets on those simmering reactors from far. They must ride the whirl wind that they have whipped up to frenzy levels by their own inconsiderate actions of QE-to-infinity in FED, CBE, now BOJ. It is just awesome the level of crass cowardice, oligarchic corruption and incompetence; as blind as the Tokyo Electric Inc. show up to date. But they at least had a justifiable excuse : mother nature, mega tsunami. Here it is totally self inflicted necrophilic damage from blind greed and praying to the all powerful god of the financialized bubble economy. 

Fri, 03/18/2011 - 10:01 | 1071061 spanish inquisition
spanish inquisition's picture

Help me figure something out. The same group of people own the central banks. They just sat around and said "I need you to buy red beads and sell blue to increase the level of yellow".

If everyone in the world sold Yen today, these guys would get together overnight and we would wake up with Yen at 80. Even though no one in the world owned Yen?

So I am seeing it as a monopoly and they are setting the values of things (debt notes) against themselves to protect their own interests as owners of the money supply. Is that close? Too simplistic?

Fri, 03/18/2011 - 10:01 | 1071066 r101958
r101958's picture

The Dis-Cord.

Fri, 03/18/2011 - 10:29 | 1071204 markmotive
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I blame the Plaza accord for Japan's massive bubble during the late 1980s. Yen appreciation killed Japanese exporters and forced the BOJ to print, fueling a speculative frenzy.


So how will this play out in reverse?

Fri, 03/18/2011 - 10:28 | 1071225 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The CBs can't stop (pardon the pun) tsunami of Yen that will be repatriated by Japanese citizens trying to survive when the country is shut down. Add on top of that, corporations, banks and local governments trying to save solvent. Pissing in the wind.

Fri, 03/18/2011 - 10:59 | 1071400 Ferg .
Ferg .'s picture

David Rodriguez over at DailyFX posted this earlier . It's a chart showing the efficacy ( or rather lack of ) of the G7 intervention in EUR/USD back in 2000 ( September 23rd ) . As seems so often to be the case it merely provided a nice spike for speculators to sell into . Whatever about the stock market , FX is one arena where central banks get their asses handed to them during manipulation campaigns . 



Fri, 03/18/2011 - 11:52 | 1071669 Ned Zeppelin
Ned Zeppelin's picture

Answer me this: the "reason" for the intervention is that this is to aid Japan so that its exports are not too expensive.  I know too well that this is bullshit, and is not the reason, and that the real reason has something to do with the yen carry trade, which I suspect underlies way too many highly leveraged transactions to have this unwind occur.

What is, or are, the reason(s) for this G-7 intervention.

Fri, 03/18/2011 - 12:24 | 1071822 viahj
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Fri, 03/18/2011 - 12:25 | 1071825 viahj
viahj's picture

double tap

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