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War On?
The G20 was a predictable dud. Our boy Tim G went to Korea trying to
sell a plan to limit external deficits to 4%. This was Ayn Rand utopian
economics that does not work in real life so all the other ministers
said “No thanks”.
There was talk in the final communiqué that currencies should not be
manipulated. That was just talk. I love it when they use words like “refrain”. What does that exactly mean?
“Countries should refrain from competitive devaluation of currencies”
The real comment on currencies came from Yoshida Noda, Japan’s finance minister:
"A prolonged appreciation in the yen is not good for Japan’s economy. Our stance, that we will take appropriate, bold action if needed, is unchanged.”
That sounds like fighting words to me. So much for peace and love from the G20. But what does "If needed" really mean?
Since nothing happened this weekend the question is how is the FX market
going to read it? The logical reaction to a status quo G20 is for
status quo FX action. Generally speaking that means a weak dollar play. I
would not be surprised to see USDJPY trade below 81.00. The Euro will
try to catch a bid over 1.40.
So we have an interesting test of the market in front of us. Do we take
another big leg down in the dollar? Or does the market just try to do
that and back away?
I weak dollar move would be a “risk on” market. One thing
fighting against the weak dollar story is that I see little evidence
that the rest of the market actually wants to take more risk on. The
tail is wagging, but the dog is not.
I thought this was interesting:
The United States and Britain, both with large deficits, agreed to be “vigilant against excess volatility and disorderly movements in exchange rates.”
That is new. It does not mean much as the adjustments taking place have
largely been orderly. It does open the door for coordinated intervention
should things actually become disorderly. This statement is most
certainly a measure of what the G 20 ministers are worried about. Their
worst fear? A run on the dollar. The catalyst for a run would come from Bernanke. The German finance minister made that clear:
“I
tried to make clear that I regard that (QE-2) as the wrong way to go.
An excessive, permanent increase in money is, in my view, an indirect manipulation of the exchange rate.”
I wonder if Bernanke even listens to this. He probably spent his Sunday
looking over a textbook on the depression. Why is this man smirking smiling?
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Bliss full Idiots do this just before you aerate their cranium.
Cause You know-they know their correct.
Bernanke 10, rest of the world 0
If things keep going like this, the US will make all those dollars floating around the world worthless within 10 years.
Ellsworth Bunker wore that same condescending smirk right up until the hour he finally had to flee Saigon. The condescending smirk is the last refuge of the self deluded, bankrupt and morally dissolute MOTU.
Interesting how the economic battle lines are little changed from the war battle lines.
Japan is in a precarious situation; their old enemies China and the and the U.S. are now at odds with each other. Japan will play it in the middle for as long as they can.
Remember when Toshiba sold our sub propeller technology to the Russians? Sometimes you stay strong by keeping the two strongest competing and on even footing.
The U.S. and the U.K. are still joined at the hip, despite a revolutionary war it is still the Mother country. Europe is little different, as it is the cradle of so many of the founding cultures of the U.S.
In a global war, the internecene divisions can be put aside; and the battle lines may be European versus Asian with Russia as the deciding factor. Slash and burn and retreat may not work in the modern age.
With all debt spending, debasing their currencies, and elbowing to survive it will be an interesting decade for certain.
Europe is simply not a factor. these people submit to a flimsy currency with mundane architectural pictures on it.
so much for nationalism, sovereignty, and heroes.
everyone is glorifying the french strike, but its just a socialist uprising, not an ideological one. they want MORE from the government; so its not any type of patriotic, anti-government movement. its just the baby grasping and cryin' at momma's outta reach tit. and btw, try getting youtube in france right now.
japan? they are the bitch of the moneychangers'; they are powerless. in fact , so is europe. why do you think their currencies are maxed out in strength? the US needs MORE... so we need to pressure china or anyone else... we're the 800 lb gorilla, like it or not.
everything else is just.. academic.
conclusion? dollar going down... like, dictatorship style. we're a war-like, "fuck it" kind of country anyway... bring it.
Japan has no army, it has been told by the US to cooperate or Japanese co's doing business in the US will be restricted by atrition, (send IRS auditors, US customs auditors, load them up with fines, disqualification from bidding on technicalities on and on.)
Japan is also being attacked by China buying tons of Yen, thus killing competition.
I agree; can't wait for the collapse of the dollar!
My guess is that he has thrown in the towel. This man likely realizes that the game is actually over and that his role is to delay that announcement while at the same time hoping that some miracle may intervene?
Amused by the whole farce?
Maybe he is watching Timmay on CSPAN?
Maybe just baked and thinking "this shit doesn't really matter anymore"?
Mr. "B" has his Glock40 loaded with a round in the chamber. When the light comes on flashing "Game Over," (I believe it will be on a late Tuesday to early morning Wednesday in 201?), he will place the barrel to his temple and utter "Shalom," pun intended, and squeeze.
With Ben's record of accomplishment I'll bet he misses.
Or maybe he just snuck out a juicy stinker.
Or maybe he's wistfully thinking of his wonderful years at Princeton and wondering how to work the Paradox of the Un-Full Deck into his resignation letter.
Dear Mr....etc...
....and as exemplified by my very own creation, the Paradox of the Unfull Deck, it has come increasing impossible to function rationally as there ain't been a single person playing with a full one in this town for the last two plus years and as such, I should like to return to the private sector where I might reacquaint and immerse myself with the philosophical purism surrounding the economic significance of watermelon de-seeding....
Or maybe he heard tell Timmah got lost at the National Museum so he won't have to sit next to him on the flight back and listen to Timmah bounce is Adam's apple up and down making gurgling noises for 12 hours.
Nah. He's smirking because he brought Timmah along with him so that there's be somebody who'd unknowingly take the ridicule and bear the brunt of the "whddaya get when ya mate a donkey with a...." jokes.
Ben smiled then descretely whispered; "Fire up the Chinook, I've got a big load to dump."
Large traders have reversed course on dollar positions last week (red line at bottom of chart):
http://finviz.com/futures_charts.ashx?t=DX&p=d1
Ditto for equity futures:
http://finviz.com/futures_charts.ashx?t=YM
Exactly. "Risk is always on." Is it War On? Well...is it? Governments, governments, governments. They've been "blowing up this year." Greece, Ireland, Haiti...New York? California? What goes on in Upstate New York? Eh, what's a "couple hundred million between friends" right? Hard to imagine the newspaper up here won two Pulitzer Prizes fighting this fight back when the same clowns who did this really weren't scary then either. This election is meaningless now...Thank God for...God. And baseball of course.
I just feel sorry for Mrs. Watanabe - she has been deprived of a good source of trading income and hopefully she is ferociously buying her Yen back. On the other hand she could use her retirement income comfortably in Hawaii or Paris !!!
The real war right now is Beilat VS Barney Frank ( down to 9 point gap ) and Angle vs Reid. ( Angle in front) If voters are finally fed up enough to get rid of the banker / fed freindly cronies Frank and Reid then American voters have gone a long way to winning the war against corruption in Congress/ Senate and the banking system.
In a Just world, Barney Frank would be arrested and placed in Solitary Confinement -- the worst punishment for a Politician -- no sycophants to stroke their egos!
and beating harry reid with sharron angle is not just beating him, it's throwing a lunch tray of spaghetti and soup on him too (logan echolls reference).
p.s. check out hussman this week and last. very insightful.
"Risk is always on." roger that.