Monday, February 16, 2009

Reserves continue to fall

Reserves are now down $280 billion from their peak back in January.


googleheim said...

I see this as a function of elastic currency. The Fed evidently has confidence there will not be a bank run or holiday.

I also see the new Japanese economic news as a possible sham on order of a 15% possibility of chance. They are reporting this early and possibly OVER exaggerated so they can get the YEN devalued so they can get off the top of stack and start exporting with a cheaper YEN.

That means the dollar would have to surpass the YEN, so we will have another spike in the U$D but the U$A will mitigate this so that our exports are not too expensive.

Musical chairs.

What is the effect of the Japanese news with respect to their USA real estate holdings ? If they sell out then real estate will soften more ?

Remember the Japanese aristocracy holds their savings outside the country so that they could avert the effects of deflating YEN of the 90's. So they will be happy with a deflating YEN so that when they make their monthly transfers from U$D to homebound YEN, they have more money.

They want a strong dollar, and the North Sea oil producers ( Denmark, Norway, etc ) also want a strong dollar since they get paid in U$D but live with Euros.

Their will be a rally of some sort for the U$D and if the FED or Treasury does their forex swaps correctly, it should equate to a boone for the U$ Tax payer ...

but you will only hear about the tax payer boone ( if it occurs )
on the Mike Norman show because who else is looking at both sides of the ledger, ocean, etc without
being a goldbug fixated on the calf at the bottom of the mountain.

Mike Norman said...

Nah. Just settlement of those forex swaps, mainly.

Yes, the yen could be overdone, I agree. That's why I just shorted some yen.