Economic Tsunami Headed Straight For The Yen

Eric De Groot at Eric De Groot - 11 minutes ago

Japan’s economy, heavily debt laden, is the world’s third largest economy. This epic human tragedy rightfully overshadows the negative, long-term economic effects of this disaster. Another, equally devastating economic tsunami is headed straight for the Yen (Japan, Inc). Fatal Radiation Levels At Fukushima Now 'Off The Scale' LETHAL LEVELS OF radiation have been discovered in areas of the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

 

 

 

 

Citi Believes BOJ Will Intervene At USDJPY 76, Says Any Intervention Will Likely Be Insufficient

With everyone and their mother now expecting the BOJ to do absolutely nothing courtesy of Noda's now hourly announcements that he is watching the JPY like a hawk, or simply a confirmation that the Japanese central bank is as toothless as the SNB (EURCHF at 1.0952 at last check) to do much if anything, here is Citi's Osamu Takashima, who writes that the BOJ will intervene at a level of 76 on the USDJPY or about 9500 on the Nikkei. Bloomberg All News summarizes the highlights of his note.
 

 

 

 

 

 

Market Reaction? 30 Year Just Hit 3.99% As Stock Selloff Accelerates, Gold At All Time Record, Swiss Franc Flash Smashes

To see what the market thinks of the economic prospects for the economy look no farther than the 30 Year which just dropped below 4.00% and is trading at 3.99% right now. The market is effectively pricing in a major economic contraction, with long-end deflation now expected. Which means that Bernanke just got yet another carte blanche to proceed with the only thing  he know. And validating it is the equity market which at last check not only did not react favorably to the Senate vote, but has been fading all the news all day, and is now trading at the lows, with the S&P, Nasdaq and Dow all down more than 1% now and plunging. Next up, even as Obama prepares to talk, everyone is once again looking at an imploding Europe which will need its second bailout in a month (and third overall) shortly... or else.

Is "The Ultimate Indicator Of Easy Money Access" Rolling Over, And Absent More QE, Is This It For The Market?

Two weeks ago courtesy of Sean Corrigan, we presented what many consider the "ultimate shorthand indicator of easy money and speculative access" - the stock price of auction house Sotheby's. Well, the easy money may be about to end, and with it the latest bout of irrational market exuberance. As the chart shows, Sotheby's has timed the three previous armageddon with uncanny precision, with the red vertical lines marking the market tops almost perfectly. These occur when the i) RSI hits overbought, a condition that has been realized now; ii) when the stock price has a monthly closing below its 12 month Moving Average, also realized and iii) when the MACD crosses below its Signal line - this is about to occur any minute. We expect the 4th red vertical line to mark the end of this particular period of uber easy money any minute, and absent another monetary stimulus, to begin the at first slow, then very fast collapse to another market secular low.

Uptrending Channel Is Beginning To Steepen For Gold

August 2, 2011, at 11:10 am
by Dan Norcini 

Check out Trader Dan’s blog at www.TraderDan.net for more commentary.
 
Dear CIGAs,
 
Since late 2008, gold has been rising in a strong and steady fashion within the confines of a channel that I have marked out on the weekly price chart. As mentioned previously, its rise has been orderly and solid unlike silver which burned itself out by rising too quickly at one point earlier this year and is just now attempting to re-establish a solid uptrend.
Since the year 2011 has begun, a new and steeper price channel appears to be forming as the fundamental factors that have driven the metal onto new record highs show no sign of ameliorationg; if anything they are growing worse.
These three factors are:
(1.) Sovereign debt woes out of the Eurozone
(2.) Raging inflation across China and other parts of Asia
(3.)  Anemic economic growth in the US guaranteeing accomodative monetary policy for the foreseeable future
One can add to this a 4th factor which is the enormous amount of indebtedness being heaped upon the citizens of the US by politicians which is sinking the nation into an inescapable mire of perpetual debt slavery and has now set the stage for an inevitable downgrade of US debt worthiness. It seems to me that this recent travesty of a spectacle, in which lawmakers actually cheered plunging the nation further into bondage has brought home the gravity of the situation to an increasing number of citizens/investors.
In the West this has resulted in a loss of confidence in the monetary authorities and political leaders which has resulted in surging demand for gold as a safe haven and vehicle to protect the earning power of accumulated wealth. In the East it has led to gold buying as a hedge against soaring food and energy costs. All of this has now come together and is feeding the bullish sentiment for the metal.

Gold has been able to better the price cap near the $1625 level and is now in the process of attacking the $1650, the level which my good friend Jim Sinclair long predicted it would approach. Should it take out this level, it looks to be on a path to $1680 based on what I can from this newer channel. Downside support is initially at yesterday’s low of $1608 followed by $1600.
Aiding its upward progress in US Dollar terms is the fact that it has once again scored new all time highs priced in both the Euro and the British Pound.


The bond market is acting as if it has totally dismissed any rating agency potential downgrades. The Long bond continues moving vertically shoving rates lower putting a huge smile on the face of Federal Reserve officials and other assorted policy makers who are gleefuly watching the fools who would entrust their wealth to paper IOU’s of the federal government. I do not care whether US bonds are considered safe compared to the bonds of many EU member countries’ or not – buying Treasuries is a fool’s game especially when the US government is spitting them out faster than a Persian cat can spit out hairballs. They are utterly and completely worthless. Even China is sick to death of the things.
More…

In The News Today

August 2, 2011, at 11:04 am
by Jim Sinclair 

Jim Sinclair’s Commentary
 
Not the news you wish to hear from your bankers.

China loses trust in US economic stewardship
Asian giant to say no to dollar dominanceBy Stephen S. Roach
Published: 00:00 July 31, 2011
 
New Haven: The Chinese have long admired America’s economic dynamism. But they have lost confidence in America’s government and its dysfunctional economic stewardship. That message came through loud and clear in my recent travels to Beijing, Shanghai, Chongqing, and Hong Kong.
Coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw. Senior Chinese officials are appalled at how the United States allows politics to trump financial stability. One high-ranking policymaker noted in mid-July, “This is truly shocking… We understand politics, but your government’s continued recklessness is astonishing.”
China is no innocent bystander in America’s race to the abyss. In the aftermath of the Asian financial crisis of the late 1990′s, China amassed some $3.2 trillion (Dh11.74 trillion) in foreign-exchange reserves in order to insulate its system from external shocks.
Fully two-thirds of that total — around $2 trillion — is invested in dollar-based assets, largely US Treasuries and agency securities (ie, Fannie Mae and Freddie Mac). As a result, China surpassed Japan in late 2008 as the largest foreign holder of US financial assets.
Not only did China feel secure in placing such a large bet on the once relatively riskless components of the world’s reserve currency, but its exchange-rate policy left it little choice. In order to maintain a tight relationship between the renminbi and the dollar, China had to recycle a disproportionate share of its foreign-exchange reserves into dollar-based assets.
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Biggest Middle Class Tax Increase in History Will Come in Five Months

Posted by : Bruce Krasting

Post date: 08/02/2011 - 12:16

Next year is gonna suck. 

 

 

 

 

What Happens When the US Banks Take a Hit On Their Senior-most Assets? Pt 2

Posted by: Phoenix Capital...

Post date: 08/02/2011 - 09:54

Make no mistake, something big is afoot behind the rhetoric and political talking points being thrown around by the White House and the GOP. That something will be some means of letting the banks get... 

 

 

 

 

 

Comfortably Numb – Drugged, Dazed and Dumbed Down - Part 2 of 2

Posted by: Cognitive Dissonance

Post date: 08/02/2011 - 13:08

Alas, this is just what the powers-that-be want. Not zonked out so much that you can’t work, but zonked out just enough that you really don’t (want to) care. 

 

 

 

 

 

 

 

Filed under more lies and bullshit...

Obama To Address Nation Following Senate Vote - Watch Live

The circus has been let completely loose, with the president now expected to address the nation following the Senate vote on the debt ceiling which by implication is expected to pass without a hitch. Naturally should the Senate vote by some miracle fail, Obama may be forced to scramble as his prepared and teleprompted remarks end up being completely useless. Watch what is hopefully the very last chapter of the farce (at least for another year) live here.

Senate Passes Debt Ceiling Vote With 60 Senators Voting In Favor

Did we say debt ceiling? We meant debt target. The important thing is that the soap opera is over! Market reaction? None. And now back to your regularly scheduled economic collapse, only this time with 120% debt/GDP.

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