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Did The BoJ Quietly Peg The Yen To Gold?

Tyler Durden's picture




 

For 14 years, as Japan's economic demise grew more and more evident, its currency devalued relative to gold (the only non-fiat numeraire). When Abenomics began, the trend began to stabilize... but for the last year or so - as The Fed tapered - JPY and Gold have practically flatlined around 132,000 JPY per ounce. This 'odd' stability stands in strangely stark contrast to the volatility and trends in the USD, JPY, and Gold over this period. Even amid the collapse in JPY in recent weeks, it has remained firmly inside a 3% envelope of the 'peg'.

 

A long trend of JPY fiat devaluation as Japan's lost decades are priced in...

 

Then odd stability...

 

Of course, this is conjecture, but doesn't it seem a little odd that with all the hot money flows and violent swings in the last year around the world, that this relationship has been for all intent and purpose - flat and managed.

 

Charts: Bloomberg

 

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Wed, 11/12/2014 - 22:13 | 5442607 philipat
philipat's picture

If so, all the more reason why China would want to destroy the Comex paper games. China is Japan's largest competitor for export business and is not going to sit back indefinitely whilst Japan devalues. If that devaluation now de facto amounts to a  declining Gold price, then China's best repsonse, especially with all the Gold reserves it now holds (5K Tonnes?) would be to start pushing up the price of Gold, thereby pushing back on JPY. Japan appears to have stopped publishing data for domestic Gold consumption and, in the true spirit of "The Central Banks of the People" not wanting to give the Muppets any escape route, fixing JPY to Gold is, to them, logical.

For the US also, the "Strong" Dollar is going to soon have an impact on exports and the trade balance. And again, given the realities of the competitive currency devaluations game, the easiet way to put a cap on Dollar appreciation would be to allow the price of Gold to rise.

Then we have the Swiss Gold referendum. It seems there may be a whole series of macroeconomic and geopolitical factors coming into play which will be positive for PM's.

Wed, 11/12/2014 - 22:16 | 5442656 Silky Johnson
Silky Johnson's picture

Except for the fact that we now live in Bizarro world. I agree that the geopolitical factors you mentioned are truly positive for PMs. Having said that, I will tell you to put an extra dollop of vaseline on, because we are going to get reamed again before all this is played out.

Good news = bad news.

Wed, 11/12/2014 - 22:20 | 5442674 philipat
philipat's picture

Yes agreed, Fundamentals don't mean a thing. But these factors are not fundamentals but things which might change the games being played irrespective of fundamentals as the interessts of the major players, China and The US, shift.

Wed, 11/12/2014 - 23:38 | 5442873 Paveway IV
Paveway IV's picture

Hmmm.... Q2 ends with an odd dislocation at the end of the quarter and then JPY  'stabilizes'. 

What could have happened in Q2 in Japan? I mean other than their continuing gift of radioactive cesium and strontium to the Pacific? I don't recall anything.

How about anywhere else in the world?

Let's see now. There was that thing in Ukraine that resulted in sanctions on Russia. As a result, nobody can buy Russian gold and Putin is 'forced' to pretty much buy up all the domestic production: 50 tons a quarter or so. Fine with him - he eventually needs it to support a gold-backed rouble or Altyn. The loss of 200 tons/yr. of Russian supply forces all central banks to switch from net sellers (because it's time for them to make gold to drop) to serious net sellers to meet the missing demand. Which interferes with dozens of Ponzi-like currency manipulation and gold re-re-re-re-re-hypothication schemes. Worse yet, it interferes with central bank's ability to manipulate (long-range) the price of gold.

Nah... probably the weather.

Wed, 11/12/2014 - 23:55 | 5442915 Paveway IV
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Kind of wondering from the smart guys here why the rouble stopped tanking almost to the day Putin said he's not defending it. Which I'm taking to be the point Russia finished unloading all their foreign currency reserves to buy roubles and refuse to go the next step and give up their gold to buy back roubles. 

Don't tell me Putin just Judo-chopped western bankers using some lame attempt to tank the rouble and steal Russia's gold? I'm probably just making an ass out of myself - this stuff is whay over my head. 

Thu, 11/13/2014 - 00:46 | 5443020 Pinto Currency
Pinto Currency's picture

 

 

Perhaps Western central banks have agreed to allow massive JPY devaluation with a coordinated drop in the USD gold price so that it hides the JPY gold "bull market" as the devaluation occurs.

Target China's export markets.

Thu, 11/13/2014 - 02:30 | 5443156 Paveway IV
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Hmm... The U.S. pisses of Russia enough so nobody buys their gold and Putin will rush out their gold-backed currency next year.

Everyone tanks the yen and gold, pissing off China who is already planning some kind of gold-backed yuan.

Central banks are unloading gold. Bullion banks are unloading gold. Gold funds are unloading gold.

Ya know, Pinto, I'm just guessing this one doesn't turn out so well for the west.

 

Thu, 11/13/2014 - 11:35 | 5444088 Pinto Currency
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And all the dear leaders will say they were shocked that destroying our currency didn't end well.

Wed, 11/12/2014 - 22:40 | 5442735 Wild Theories
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China is a competitor of Japan for some exports, but they are not each other's biggest competitor.

Germany and South Korea are more direct competitors of Japanese products than China.

China and Japan mostly occupy different ends of the market for manufactured goods.

 

They are probably big competitors in the capital markets for foreign investments and capital flow though.

Thu, 11/13/2014 - 02:30 | 5443155 Libertarian777
Libertarian777's picture

that makes no sense. If China is stacking physical they would WELCOME paper games to push the price down so they can dump UST and get physical.

 

Thu, 11/13/2014 - 03:56 | 5443210 Aeternus
Wed, 11/12/2014 - 22:02 | 5442609 Its Only Rock N Roll
Its Only Rock N Roll's picture

Its the only way the financial repression works.  Don't give the Japanese an easy out.

Wed, 11/12/2014 - 22:01 | 5442612 Al Huxley
Al Huxley's picture

I'm trying to work out the mechanics and I just can't see how the BOJ would pull this off - the whole thing seems wildly improbable.

Wed, 11/12/2014 - 22:28 | 5442661 aVileRat
aVileRat's picture

Yeah, a gold peg would be met with massive gold orders being placed into the phys market, in which case you would see ABX + every goldbug writing about the record bump in delivery positions. It's hard to hide something like this from the delivery boys. Not buying it until I see Abe peg

However if he does peg, and raise taxes, the sudden reversal in strength into the Yen, and out of every other psudo-Hard currency would lead to a Korean/Japanese dead-stick tailspin from index highs. Which would require him to delay his Tax hike, to make it at least appear he can make repayments on his debts. However strength in Yen would suddenly make it very easy to blow through his foreign debts, as historically gold backed currencies trade at a 30% premium to their fiat basket.......

 

Wed, 11/12/2014 - 22:31 | 5442711 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

You two don't get it. As usual.

Wed, 11/12/2014 - 22:59 | 5442777 NoDebt
NoDebt's picture

Al- Couldn't agree more.  Every now and then I see a chart here that leaves me reaching for an explanation.  This is such a chart.  It's fucking freaky.  Maybe coincidence as gold is dropping along with the Yen.  Or maybe that's the monetary end game- all currencies devalue to some point of parity with gold.

But if I was a betting man, I would bet it doesn't persist.

Wed, 11/12/2014 - 23:34 | 5442863 HardlyZero
HardlyZero's picture

Hey you guys...what about.

Japan 'buys' Iran's Oil.  Iran is heavily in the Gold Trade.  Maybe there is somting' goin' on between the Petro-Rial and Japan ?

Maybe Japan is paying for Iran's Oil using Gold and somehow keeping a lid on prices ?

Goldfinger manuever ?

Wed, 11/12/2014 - 23:36 | 5442870 Proofreder
Proofreder's picture

It's random - just a random walk

Coincidence, nothing more.

Now watch some conspiracy nutcase utter: "There are no coincidences, everything is planned and for a reason, I know it"

Thu, 11/13/2014 - 00:55 | 5443038 philipat
philipat's picture

Correlation is not causation and I agree that this is largely because, for different reasons, both are being manipulated lower and the algos are temporarily programmed in unison.  In fact, the last thing that Japan wants is a Yen pegged to, therefore implicitly backed by, Gold. But the damage has already been done in a competitve currency sense (Aka the race to the botton) so I do think that there will be retaliation in some opaque form from other major trading partners, especially The US and China. And again, allowing Gold to rise would suit the objectives of both and Japan would suffer as there would be a rush into Gold and a possible run on Banks.

Thu, 11/13/2014 - 02:55 | 5443160 zhandax
zhandax's picture

Correlation is not causation in theory, but in troubleshooting, its is usually the best place to start looking.

Thu, 11/13/2014 - 03:00 | 5443173 philipat
philipat's picture

True, and I guess Occam's Razor has a certain relevance here also. Let's await the response from China and the US and see what happens then..

Thu, 11/13/2014 - 04:44 | 5443250 Max UK
Max UK's picture

The link might be indirect. There might be some third ingredient to which the yen and gold are both directly linked.

Wed, 11/12/2014 - 22:42 | 5442736 lasvegaspersona
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RAT
there is no physical gold market. You can buy a few coins (if you are a shrimp) but you use paper gold if you need to show gold in SIZE.
With only 3,000 tons coming out of the ground each year there is just not enough for countries to enrich their central bank balance sheet. The physical is all used to keep the peons happy. When no physical gold can be delivered...then it will get interesting. Until then we are just watching 'gold the fiat, fractionally reserved currency' being traded amongst the big boys.

Thu, 11/13/2014 - 00:10 | 5442949 conscious being
conscious being's picture

Huxley - Improbable yes. But there it is. That kind of coorrlation can't be random. Maybe its some unintended consequence of some upstream price supression?

Thu, 11/13/2014 - 03:15 | 5443181 philipat
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I suspect that the algos are programmed to respond:

Lower Yen = More Yen Carry = More USD Buying = Strong Dollar / S&P = Gold weakness = Buy Dollar / S&P and Sell Gold

That could well continue until one of the variables changes and the algos get reset? To that extent, there may even be causation, at least for now.

Thu, 11/13/2014 - 07:31 | 5443355 zenon
zenon's picture

The BOJ could not peg the Yen to gold. They have no gold reserves (of any substance). If this correlation bewteen the 2 is indeed managed it has to be someone else doing the management (Hint: Fed and/or BIS).

Wed, 11/12/2014 - 22:06 | 5442613 SilverIsMoney
SilverIsMoney's picture

Turd Ferguson pointed this out weeks ago and it's literally been spot on since for the exception of last Friday when Gold finally broke out of it only to die again on Sunday night and get back on par with the Yen on Monday... here we are again Wednesday and it's still trading in tandem.

Must REALLY suck to be a Japanese Stacker right now...

Wed, 11/12/2014 - 23:31 | 5442852 Teamtc321
Teamtc321's picture

Paper price probably sucks for all stackers.... I don't give a shit, I'm still stacking. I will keep on stacking and all the talk shit to stackers can blow it out your ass.

I'm stacking....if we are right, FU, if we are wrong, FU.

Wed, 11/12/2014 - 22:06 | 5442626 Börjesson
Börjesson's picture

I wonder if oil in JPY doesn't look much the same. Would be a more likely peg, wouldn't it?

Wed, 11/12/2014 - 22:05 | 5442628 Blubaba
Blubaba's picture

No peg. They both loses against USD

Wed, 11/12/2014 - 22:42 | 5442741 buzzsaw99
buzzsaw99's picture

^^^THIS^^^

Wed, 11/12/2014 - 23:36 | 5442871 mcguire
mcguire's picture

plus, pegs are really confidence games.. if you peg your currency to x, you want people to know it.  thats really the point, is it not?  you are trying to inspire confidence in your currency by letting the whole world know you are pegging to X (gold, usd, whatever).  then game theory takes over... sort of hard to play the game when nobody knows you are playing but you...

 

Wed, 11/12/2014 - 22:12 | 5442646 Wild Theories
Wild Theories's picture

now this is the sort of conjecture worthy of putting a tinfoil hat over

seriously, I prefer these types of wild theories to ghetto booty clickbaits

Wed, 11/12/2014 - 22:15 | 5442655 Robot Traders Mom
Robot Traders Mom's picture

In a long-term race to debase, this would be a death wish to any central bank...

TopTheNews.com

Wed, 11/12/2014 - 22:23 | 5442686 Spaulding 3.0
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two turds in a sea of dollar denominated debt ..... 

Wed, 11/12/2014 - 22:33 | 5442698 lasvegaspersona
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No way does the Yen price have anything to do with the POG...other that the fact that it is related to all other currencies through it's relationship to the dollar.
What would be the motivation to a peg that will be meaningless when the fiat market place collapses?
Japan will lead the way however, so they can be proud of that.

BTW the gold price you speak of is also a paper price. It is determined by the XAU/USD. Both are traded in huge quantities on the Forex market every day.
The amount of gold traded on the Forex is equal to about 3 times the annual mining production...daily!!!
Physical gold sales could be increased by a factor of 10 and they still would not matter.
Only when physical supplies dries up will it count for anything...and by then the Yen won't matter either.

Wed, 11/12/2014 - 22:29 | 5442703 Confundido
Confundido's picture

ENOUGH OF ALL THIS IDIOCY ABOUT SURPLUS COUNTRIES PEGGING TO GOLD. GET THIS THROUGH YOUR HEAD: NO POLITICIAN, NONE, WILL EVER WANT TO DEPEND ON GOLD. BE IT AMERICAN, CHINESE, RUSSIAN OR JAP. IT DOESN'T MATTER WHERE THEY ARE. AS LONG AS THEY ARE POLITICIANS, THEY WILL NEED FIAT CURRENCIES TO FINANCE THEIR AGENDA. CHINA WANTS THE YUAN TO BE THE GLOBAL RESERVE CURRENCY TO BE ABLE TO FINANCE A NAVY AS FORMIDABLE AS THE US', WHICH CAN ONLY BE DONE WITH PAPER MONEY. NOT GOLD. GOLD IS THE CURRENCY OF NATIONS ONLY WHEN THESE NATIONS ARE RULED BY MERCHANTS, NOT POLITICIANS. GOLD AND DEMOCRACY DON'T MIX. 

Wed, 11/12/2014 - 22:35 | 5442717 lasvegaspersona
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Con
I agree generally, but look at the Euro. It has 10,800 on the ECB balance sheet. It will be used to stabilize the currency howe ver. You are correct about fiat winning in the end...as a medium of exchange...and it works fine in that role...it just sux as a store of value.

Wed, 11/12/2014 - 22:56 | 5442772 petkovplamen
petkovplamen's picture

corporations are merchants, therefore you lose. and BTW, yelling won't make your point appear more "right".

Wed, 11/12/2014 - 23:02 | 5442791 Confundido
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No, precisely: Corporations are not merchants. Not if they are not owned by a major voting shareholder. 

Wed, 11/12/2014 - 23:09 | 5442802 mcguire
mcguire's picture

I DONT KNOW WHAT WE ARE YELLING ABOUT!!! https://www.youtube.com/watch?v=aTRSmjUfYrs

Wed, 11/12/2014 - 22:40 | 5442722 Evil Bugeyes
Evil Bugeyes's picture

Not very likely...

Wed, 11/12/2014 - 22:43 | 5442743 Latitude25
Latitude25's picture

Two thoughts come to mind.  Yamashita's gold.  Also what did Japan do with all that trade surplus they had for so many prosperous years when the were kicking US ass economically.  Could they have bough a few billion in gold?

Wed, 11/12/2014 - 22:45 | 5442749 The_Prisoner
The_Prisoner's picture

Yen Cross, what are you thoughts on this?

Wed, 11/12/2014 - 22:56 | 5442770 ebworthen
ebworthen's picture

Maybe Japanese citizens are converting their Yen to Gold because they don't trust their government anymore.

Wed, 11/12/2014 - 23:21 | 5442825 cigarEngineer
cigarEngineer's picture

Sorry, but instead of charts, can you put some statistical or reliability-engineering model to support your conjectures? It would be two or three lines. Easy. This is the 21st century; looking at funny shapes on charts doesn't cut it anymore.

Wed, 11/12/2014 - 23:22 | 5442832 ssp2s
ssp2s's picture

It just means that Central Bankers are devaluing Yen and Gold at about the same rate.

 

Of course, one of these will rebound once the Yen collapses.

Wed, 11/12/2014 - 23:42 | 5442884 Fuku Ben
Fuku Ben's picture

Abe and his gang aren't smart enough to pull this off unless that had outside help. There's plenty of it from a few particular groups. The same one's that gave recommendations about where to build and Fukushima and assist in running it and saying how safe it would be

If this is happening it is a front runner for the controllers to set up Japan as the trial balloon to see if anyone shoots, judge the reactions, plan for contingencies to see if it can be rolled out in the West. If it goes South Japan takes the political hit with China

Why risk a Western country when you can sacrifice a country in the East first

In American terms think of it as the test run for rolling out martial law in Boston Bombing or the test run for pandemic quarantine martial law in Dallas & NYC

Wed, 11/12/2014 - 23:55 | 5442916 cwwang
cwwang's picture

Got to flat line the real currency (gold) first before doing it to the fake ones.  All the volilatility involve in fake--er paper money.

Thu, 11/13/2014 - 00:58 | 5443047 MrSprottJr
MrSprottJr's picture

I like the guy who was YELLING where's he at???

Thu, 11/13/2014 - 01:07 | 5443063 Bunga Bunga
Bunga Bunga's picture

Buy Yen, what can go wrong?

Thu, 11/13/2014 - 02:23 | 5443148 AE911Truth
AE911Truth's picture

Perhaps the apparent "peg" is related to this offer?

https://s3.amazonaws.com/khudes/ltokyoembassiesoutoftokyo.pdf

Thu, 11/13/2014 - 02:41 | 5443166 AE911Truth
Thu, 11/13/2014 - 02:37 | 5443161 DaveA
DaveA's picture

Three things needed for a gold peg to work:

* The central banker must announce the peg openly.
* People must believe him.
* He must hold the peg at all cost (stock market collapse, bank failures, gov't default, etc.) No more printing money to cover budget deficits!

Thu, 11/13/2014 - 02:44 | 5443169 anachronism
anachronism's picture

I am afraid that this just so much "numerology". The "peg" to gold is non-existent. The "stability" perceived in the charts is just an accident of circumstance. The relationship of the Yen to gold is absolutely irrelevant to anyone but a gold bug. It is the relationship to the dollar foremost, then to the Chinese Yuan, the Korean Won, and the Euro (in that order) which is relevant.

When the US pulled away from the gold standard in 1973, the exchange rate was about 300 yen to the dollar. When New buzz word "globalism" became fashionable 20 years later, the exchange rate was about 150 yen to the dollar. 8 years later, it was around 75 yen to the dollar.

That is the absolute opposite of devaluation, And it paralyzed the Japanese economy in the process. No country would do that to itself voluntarily. I do not have a grip on what and who were the political and financial forces which strove so successfully to price Japan, Inc. out of the market for industrial goods. But it was coincident with the decision by our "Manchurian President" to move U.S. manufacturing to China, supported by the vast majority of Republicans over the strenuous objections of the majority of Democrats.

 

Thu, 11/13/2014 - 03:30 | 5443198 Arius
Arius's picture

"But it was coincident with the decision by our "Manchurian President" to move U.S. manufacturing to China"

 

Forgive me, but i am at a loss here ... how could he do that?  well, i know he is the leader of the free world, the most powerful person in the planet and all that, but still i am not sure how could he be able to pull this one off ???

 

well, i guess the more appropriate explanation is that we need someone to blame for our failures ....

America simple become uncompetitive and capital moved elsewhere ... it is all about free markets and competition!

Thu, 11/13/2014 - 04:27 | 5443233 anachronism
anachronism's picture

In 1992 -between the Iowa caucus and the New Hampshire Primary- the British government brought to light that Bill Clinton snuck out of the UK in 1972 (where he was supposed to be studying at Oxford under a Fulbright scholarship) to the Soviet Union. He traveled there without informing the US Government nor using his US passport, which was a requirement at that time. While in the USSR, he spent 6-7 weeks at a KGB-sponsored "camp" where he was trained as a seditionist. Then he returned to Britain where he was an organizer of anti-US demonstrations.

The Brits thought that the American people ought to know what kind of person they were considering for the presidency But, instead of whipping Americans into an outrage over this anti-American "commie" trying to sneak his way into the White House, the Mainstream Media whipped the American public into outrage over the "nerve" of the Brits to meddle in our internal affairs. And so, The "Manchurian Candidate" became President.

Immediately after becoming president, Clinton set out a strategy for the 21st century, based upon the premise that China within the next 50 years would surpass the UNited States in both economic and military might; and that it would be smart if America helped China become this greater power in the hope that America would hold a special relationship with this greater power akin to the relationship that the UK has with America. He force-fed this strategy upon American Corporate executives, admonishing them to get over to China, to make nice to the Chinese, and to help them with their industrial development. He warned our gullible and short-sighted businessmen that, once China became the top dog, they would "remember" who their friends were at the beginning.

Over the next several years up to his re-election, there were countless reports of Chinese money being funneled into Clinton's personal and political coffers. These were reported regularly in the Wall Street Journal, along with numerous cases of favoritism displayed toward the Chinese, including -but not limited to- transfers of military technology, strategically-sensitive governemnt property and access to our nuclear (weapons) research labs. But the Mainstream Media ignored what they could, and played down the rest.

Thu, 11/13/2014 - 07:34 | 5443358 A82EBA
A82EBA's picture

great refresher thanks

Thu, 11/13/2014 - 22:27 | 5446970 zstard
zstard's picture

According to the Corbett Report it's been going on much longer than that. 

https://www.youtube.com/watch?v=5M1KD7Dnq4s

Fri, 11/14/2014 - 13:13 | 5448698 besnook
besnook's picture

i happen to know the the collapse of japan was an organized takedown led by chase manhattan. the frustration of the american investment banks with japan were the strict capital controls japan has on hot money. this problem led to the invention of currency and interest rate swaps and derivatives where all these instruments were used as proxies for the extraction of wealth from the japanese economy. once they got the hang of it the bankers drained as much wealth as they could from japan, inc. and left a shell behind while moving onto korea and now china.

 

the chinese are wise to the parasite, scavenger economic model the usa has adopted internationally and has stifled any efforts to scavenge the chinese economy by pegging to the dollar with a stronger currency than the dollar(the key, who is pegging who? especially now that the chinese economy is bigger than the usa's)

Thu, 11/13/2014 - 02:48 | 5443171 q99x2
q99x2's picture

All I can say is Wow Bitchez. Neat find.

Thu, 11/13/2014 - 03:05 | 5443179 honestann
honestann's picture

Interesting, given the duration.  But sorry, no way gold will continue to zero with the yen.  Zero chance of that.

Thu, 11/13/2014 - 04:00 | 5443209 Apostle of Unknown
Apostle of Unknown's picture

Well, actually, now that you mention it... I've heard this strong relation between yen and gold (since 2013?) being discussed before, between people who are decidedly not tin foil hatters. They were thinking more in the direction of some kind of yen carry trade which somehow involves gold or gold lending.

But yes, it's all just conjecture and not really sure how or why such a trade would work.

Thu, 11/13/2014 - 04:26 | 5443232 CHX
CHX's picture

Not a peg, but the golden floor of a dying fiat currency... 

Thu, 11/13/2014 - 04:38 | 5443245 Central Wanker
Central Wanker's picture

Gold in EUR looks quite similar.

Thu, 11/13/2014 - 04:57 | 5443254 praps
praps's picture

GBP also flat against gold for last year.

Thu, 11/13/2014 - 05:23 | 5443268 css1971
css1971's picture

From a business point of view it makes a lot of sense for a country which depends on raw material imports.

Devalue to competitive advantage then peg to maintain stability.

 

I dont see how they enforce it long term though once the market understands.

Thu, 11/13/2014 - 05:59 | 5443296 maneco
maneco's picture

I am sure the boys at the Bank for International Settlements have got something to do with this. After all, the B.O.J. is one of their clients.

Thu, 11/13/2014 - 06:05 | 5443302 Tic tock
Tic tock's picture

?rotating out of stocks , through Japanese Banks, and selling Gold against Yen, giving market-watchers cause for despair: perhaps, using Comex POG to manage the value of  equity sales?

?Hidden Dragon, giving Comex cause for concern, a clear signal that Japanese intentions may reflect more stable monetary policies, and Comex retorting with added volatility?

?A Zero-sum game, financial instruments would naturally trade into equilibrium in a steady-state environment, divorced from meaningful productive improvement, or positive interventions, would computers trade all financial instrument towards the lowest unit of value?

?Large contracts on Gold are beng settled with Japanese equity, courtesy of the BOJ?

Thu, 11/13/2014 - 08:32 | 5443423 hedgiex
hedgiex's picture

This is a spin out of correlation. The trade and investment flows experienced by Japan and their effects on the Yen is not within the control of Japan's bureaucrats.

They can only respond to the pricing dictated by global markets. No sane trader in global markets believe that Japan's CB pegging Yen to Gold.

 

Thu, 11/13/2014 - 09:01 | 5443466 Quinvarius
Quinvarius's picture

No.  They and the other central bankers started shitting their pants and trying to sit on the paper price.  Gold rising in Yen, as Yen goes into the toilet would upset the derivatives market.  It will happen anyway.  You will just think it is a premium on physical instead of an actual market price.  Hedging in paper at these prices is locking in a loss.  The industry is not doing it, except for maybe a few miners who are really just paper traders standing next to a hole in the ground. 

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