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Let's see if this scenario plays out afterall.

There are several studies (need to check my library after trading hours) which show US unemployment to be around 9%, which is a bit better than the one of bigger EU nations (like Germany and France which are at 10-12%). It makes sense, as the first world economies are not that much different...

At least your news sources are not citing nonsense like "yen is falling because of high oil prices" like most do... It's true that the only reason why Yen is collapsing is due to the "carry trade". But reemember, many hedge funds take bigger risks as the managers need just ONE year to...

In other words, cut wages (in real terms) to boost corporate profits. PS: Not about Japan, but I recently read that in US, corporate profits as % of GDP were at the highest levels since 1960s. No wonder there's a "global savings glut" as capital ends up in fewer and fewer hands at the top of...

Let me try to interpret what you're suggesting and sum it up: Basic goods (foodstuff, energy etc) expressed in Yen is going higher every day (commodity index in JPY is +40% YTD -see chart above-). By letting Yen fall (or actually actively intervene on weakness to further destroy its value...

Goldman Sachs Commodity Index, expressed in Yen is +40% YTD (esignal data has bad ticks, hence the spikes):

I don't get it, I really don't. E.g., in today's 6mo US debt auction, 40% of the issuance was absorbed by Foreign Central Banks. Not by "real" investors, just mindless, price-insensitive buying by government agencies (foreign central banks). Also today, ALL commodities (except the...

I agree that Yen would be a buy, on several reasons (some of which I've outlined in prior posts) Anyway, I don't get it, I really don't. E.g., in today's 6mo US debt auction, 40% of the issuance was absorbed by Foreign Central Banks. Not by "real" investors, just mindless...

How exactly does Renaissance's methodology of (quoting original message): "The firm relies on a system to make thousands of rapid-fire, short-term trades daily to take advantage of small, fleeting anomalies in various markets." achieve the tasks you mention? Actually, last few years...

In short, Mish seems to think that by lowering the real rates to subzero after Bubble-I, the neocon government actually bailed out the banks. But he thinks the neocons will not care about the American consumer, who is now on the hook after Bubble-II. As discussed above, in the end it's a...

An interesting discussion of this subject: http://globaleconomicanalysis.blogspot.com/2005/06/deflation-debate-heats-up.html Also see comments by others on same thread.

The scenario you've described was exactly my idea as well. i.e. a downwards breakout from last month's consolidation range 1.20-1.22, towards 1.19, which will prove to be a false breakout and then a rally back up to 1.25-1.30.

Mish is making a case for deflation. But see the comments of visitors: http://globaleconomicanalysis.blogspot.com/2005/06/questions-for-inflationists.html

Q1 outstanding U.S. debt by sector, courtesy Fed flow of funds and Bureau of the Public Debt, in trillions of dollars (Q1 2000 in brackets): Federal: 7.8 (5.7) Household: 10.3 (6.6) Business: 7.8 (6.1) Financial: 11.8 (7.6) Total: 37.7 (26.0) And this is going to be paid back in...

I'm copying a reply in the gold thread, as the Economics category is more relevant: Recent price action (stronger dollar, precious metals crushed etc) suggest that markets don't think US debts will be "inflated away". At least not right now. Can it really work without "inflating the debts...

Euro and Europe have their share of problems, that's for sure, but if you want to read a "balanced" view on the issues, read this: http://www.safehaven.com/article-3354.htm

Can it really work that way? I mean without "inflating the debts away" ? Will US citizens pay with more valuable dollars the debts they have accumulated over the last few years? How exactly are the US citizens going to manage servicing those debts, with interest rates rising AND the "real"...

Let me add this: I would NEVER, repeat NEVER, have imagined that the powers that be would be able to prop up USD to these levels of 90. And I admit that I was wrong about their ability to make it happen, regardless of underlying reality and funnymentals (even the skewed one fed to the media)...

Also, wrt Japan's "competitive devaluation" i.e. depressing the Yen: Instead of pressuring China to reval RMB, USA would gain more (by not losing even more "real" jobs) if the Japanese would let their currency appreciate to 100 or even 90 (i.e. let it appreciate 10-20% from the current level...

Funnymentally, I'm bullish on Yen/USD. And I think a long from here (long 0.009080, or short 110.95 in spot forex terms) is a low-risk trade. Still, price action of Yen on chart last few weeks has been simply awful. And, the Japanese gov/CB have a criminal record of destroying their...