Yen Bottom May Be In: Implications

Zero Hedge documents the end of the manufactured decline in the value of the yen vs. the USD (LINK).  This looks to be a good yen buy point, in my opinion, because a multi-year record amount of bullish positioning in the yen accompanied this decline.  One would normally expect at least a few percent reversal [...]

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Germany’s Incomplete Economic Recovery Supports the Bond Bull Market

Germany’s national economic statistical repository provides an interesting set of graphs that correlate with the collapsing interest rate structure in that country.  Two-year bunds now yield a negative 0.08% per year.  The 10-year bund yields 1.27%, down from over 2.1% only one year ago.   No wonder that with the U.S. interest rate structure so [...]

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Par For The Pathological Course

Economic policymakers are like children in that they are held only partially accountable for their mistakes and misdeeds. And just as children learn to selectively deny responsibility to get away with naughty behaviour, so policymakers learn that they, too, can conveniently disown the ‘unintended consequences’ of their actions. It is thus refreshing to see that [...]

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How Japanese Bonds Might Still Be a Good Investment

Periodically the blogosphere, as well as some of the MSM and academia, raise the question of how Japan’s government is going to avoid insolvency.  Federal debt exceeds 200% of GDP and continues to rise.  Until now, the solution has been for interest rates to decline, thus allowing interest costs  to stay relatively stable.  

The bogeyman [...]

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Good News: The Financial Times Is Bearish On Gold

The Financial Times is out with “reporting” titled Investors beware gold’s deceptive beauty.  It suggests that some guys who stole a few million dollars worth of gold rush-era gold from a California courthouse this week have picked a top.  By which the article makes clear, said proposed top is not a mere trading top but [...]

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Still Staying Away from Risk, with MF Global a Downside Catalyst

I’m getting back to normal posting after travel, and want to uptake my “risk off ” posture.

Regular readers know that I went 180 degrees to a “risk off” posture in early May from the aggressive risk on posture I had assumed in late August 2010, and then after the stock market hit what I [...]

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Dealing with Financial Repression

Given the article posted today by Econophile on the WSJ and inflation, I thought it timely to submit some quantitative considerations for anyone with savings who has to deal with interest rates on savings that are below the rate of price increases for consumer goods and services. 

The WSJ  writer’s view is that the authorities “should” inflate away debts.  [...]

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