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Just as Japan is starting to unwind its carry trade, a new one might be forming in the form of 1% base rates in the United States. The carry trade was very popular amongst Japanese retail investors, especially using leverage (see article – hat tip Yves Smith). But, this trade unwound in a [...]

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Of the major currencies, the Japanese Yen has been the strongest in the last few months, while the Australian Dollar has been the weakest. These two currencies have also been the most conspicuous in the Japanese carry trade. That trade is now coming unstuck, precipitating changes of epic proportions.
For those of you who [...]

Although off its highs for the day, the Japanese Yen is still looking very strong against every major currency. Earlier, it pushed as high as 92 yen to the dollar. Jim Rogers was on Bloomberg saying it was headed much higher.

Something dramatic is happening in the currency markets. I commented on this in my post “US Dollar rising dramatically.” These currency moves are related to international dollar debt, the carry trade unwind and expected interest rate cuts due to slow growth.

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The U.S. Dollar is rising once again. As the realization kicks in that the U.S. will not be alone in its economic struggles, currency traders are making major bets that interest rates will fall outside of the U.S. across the board. The British Pound, the Euro and the Canadian Dollar have all been [...]

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Yesterday, I made the case for us to be less concerned about the U.S. and even Western Europe, but to be very concerned about a slowdown in Asia. The reasons for this are simple: most analysts now understand the extent of problems in the U.S. and Western Europe.
This, is part of the reason [...]

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There are some great ideas out there about what the U.S. bailout is all about. Earlier, I mentioned my belief that it had everything to do with marking to market. Just a while ago, I caught a post that has a very intriguing angle on the plan: it’s the mother of all [...]

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It was about 4 weeks ago now that I said I thought the dollar rally was not a fundamental move, but a monster bear market rally which will end up hurting dollar shorts. Back then, the Euro was trading for 1.5164 dollars. Today, the Euro will only get you 1.426 dollars. That’s a move [...]

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Most Americans would have you believe that the U.S. Federal Reserve was entirely responsible for the monetary conditions which created the mother of all stock market bubbles after the LTCM bailout. Yes, the Fed was complicit in the extraordinary rise of technology in the late 1990s. However, it was the Bank of Japan [...]