Apple Raises Prices for Some Products in Japan on Yen

Sovereign countries devalue their currencies as an attempt to stimulate their exports.  It's usually successful in the short-term, but the unintended consequences are higher import prices and inflation (despite official justification for mild inflation), which in the long run, dampens the economy.  And when all countries engage in the "beggar-thy-neighbor" currency war of devaluation, international trade stalls, even when inflation rises.  See Great Depression.  See today.

http://www.bloomberg.com/news/2013-05-31/apple-raises-prices-for-some-products-in-japan-on-yen.html

Kyle Bass Is "Perplexed" At Gold's Low Price

http://www.zerohedge.com/news/2013-04-09/kyle-bass-perplexed-golds-low-price

GAIM 2013: Yen could hit 200 vs. the dollar - Hayman's Bass

http://youtu.be/LDs_vnyzmWU

Is It Beginning? Biggest JGB Price Collapse In Over 10 Years Triggers TSE Circuit Breakers

I've said many times the Japanese government bond market will collapse.  The only question was when.  We have reached that "When."

http://www.zerohedge.com/news/2013-04-05/it-beginning-biggest-jgb-price-collapse-over-10-years-triggers-tse-circuit-breakers

Kyle Bass Warns "The 'AIG' Of The World Is Back"

http://www.zerohedge.com/news/2013-03-12/kyle-bass-warns-aig-world-back

The secret bull market in gold

http://www.marketwatch.com/story/the-secret-bull-market-in-gold-2013-03-06

Japan lashes out over depreciating dollar and euro

Anybody still have doubts about whether a currency war of devaluation isn't taking place?

http://www.gata.org/node/12080

Kyle Bass Interview

http://youtu.be/t7Si3XTl6zQ

Yen-yuan direct trading to start in June

Take away message:  USDollar's status a the global reserve currency is tenuous at best.

http://www.google.com/hostednews/afp/article/ALeqM5jhqaTaT7LRk2gYyD05lmLJMDLJtQ?docId=CNG.78782f3a5fba2c9a595e61ea288f1c19.371

The Yen's Looming Day of Reckoning

I've always said the Japanese bond market would collapse, as will it's economy.  I've been wrong up until now, but it's looking more and more probable.


http://english.caixin.com/2012-03-23/100372177_all.html

China, Japan to Back Direct Trade of Currencies

This is another nail in the coffin of USDollar hegemony.  The impact of the USDollar losing its global reserve currency status will be loss of purchasing power and lower standard of living for US citizens.  Need proof?  Look around.


http://www.bloomberg.com/news/2011-12-25/china-japan-to-promote-direct-trading-of-currencies-to-cut-company-costs.html

Yen intervention friendly towards the yen carry trade

http://traderdannorcini.blogspot.com/2011/03/yen-intervention-friendly-towards-yen.html

Marc Faber On The Japanese Disaster, On A 20% Market Correction And On QE18

When Japan collapses

http://theburningplatform.com/blog/2010/09/15/when-japan-collapses/

The Oldest-Established Store Of Value Moves To Center Stage

http://www.zerohedge.com/article/don-coxe-dissects-gold-oldest-established-store-value-moves-center-stage

That gold and the dollar are fundamentally inversely correlated to each other is obvious. One bets on gold because one is deeply skeptical that governments will fulfill their promises.

So why are they both in a mini-bull market?

So why didn’t inflation come roaring back when Bernanke doubled the Monetary Base and M-2 was climbing at double-digit rates?

And why didn’t inflation come back when central banks across the OECD were growing their monetary bases and money supplies were climbing? And why did gold take off to record levels when money supply growth began to dwindle and actually turn negative?

We believe that Gold’s recent rise began when investors sought a classic inflation hedge, but its real run came when deflation risks were far more obvious than any evidence of inflation.

As we have written in these pages, gold is the classic store of value. It should retain its value under both inflationary and deflationary conditions.

That means a great time to buy gold to make capital gains is when inflation is rising.

It also means a great time to buy gold to conserve existing wealth is when (1) prospective risk-adjusted returns on bonds and stocks look unattractive because the economic outlook is for slow growth with (2) a risk of a renewed downturn that would hammer the value of stocks—particularly financial stocks—and real estate anew, and (3) bond yields are too low given the endogenous risks in the currencies in which they are issued and (4) the range of future fiscal deficit forecasts is from grim to ghastly.

What we believe is unfolding is a rush into gold by individual investors who look at the astronomic growth in financial derivatives—particularly collateralized debt swaps—and government deficits at a time when the effects of demographic collapse are finally being understood. According to some guesstimates we have heard, the supply of outstanding financial derivatives may be in the $70 trillion range, dwarfing the combined value of money supplies and debts. The total value of gold is so minuscule in comparison to the supply of these software-spawned instruments that it cannot be any real help in stabilizing global finances—but it can be a haven for investors seeking to protect themselves against an implosion of majestic proportions.

That is why gold and the dollar can—if only for a brief time—rise together, as investors see that the only major currency alternatives to the dollar—the yen and the euro—are backed by rising national debts, rising numbers of pensioners, falling working-age populations, falling real estate prices, and a falling OECD share of global GDP.

So…as a store of value for future generations,

If you can no longer believe in residential real estate,
and you can no longer believe in bank deposits,
and you can no longer believe in the dollar,
and you can no longer believe in the yen,
and you can no longer believe in the euro…
What can you believe in?
How about gold?

It’s so old, it’s new again.

It can’t be synthesized.

It’s been despised by every liberal economist since Keynes.

ECU Group's Philip Manduca on the tipping point

Philip Manduca discusses socialism, Greek debt, the euro, the USDollar, equities, the US Treasury market, and the yen.

http://www.cnbc.com/id/15840232?play=1&video=1451117844

The beginning of the end for USDollar hegemony

I have had many discussions among friends about the inevitability of the collapse of not only the USDollar, but all paper currencies. People shouldn't mistake the recent weakness of the Euro as a sign of strength in the USDollar. Almost all developed world countries share the same characteristics of high deficits, huge debts, and weakened economies--with poor prospects for growth. The end of USDollar hegemony is around the corner. Again, it's a matter of when, not if. Sovereign central bankers can paper over their insolvencies for only a finite period of time before the bond vigilantes attack their respective currencies.

Every major trading country has initiated attempts to diversify away from a declining dollar. Part of that strategy inevitably includes adding gold reserves. China, Brazil, Russia, and middle eastern oil-exporting countries have already made plans to trade in currencies other than petrodollars.

http://abcnews.go.com/Business/wireStory?id=9958995

My take is that even if the IMF's Special Drawing Rights (SDR) are used for global trade in lieu of USDollars, hard assets will likely appreciate against any other currencies, due to all four currencies included in SDR's (Japanese yen, British Sterling pound, the Euro, and the USDollar) having been debased by their respective central bankers. It's a mad dash to the bottom, as all countries desperately devalue their respective currencies in an attempt to stimulate their economies. As controllers of the world's reserve currency, the US just happens to be the worst offender.

New currency

The Chinese and Brazilians decided to trade in their own currencies, in a diversification away from a sinking USDollar. Then the Chinese and the Russians demanded a new world reserve currency, the IMF's Special Drawings Rights (SDR), which is an index of the USDollar, the Japanese yen, the Euro, the British Pound Sterling. With the closure of the gold window in 1971, SDR's are no longer pegged to gold.

The middle eastern petroleum exporting countries, the so-called the Gulf Cooperating Council (GCC), are creating a new currency, the Riyal, in an effort to sell their crude oil in a denomination other than the USDollar.

It seems every country is nervous about USDollar hegemony due to its plummeting value. Now even the banana republics are trashing the dollar, and welcoming the Sucre.

http://www.presstv.ir/detail.aspx?id=116914§ionid=3510213

Folks, this is no longer science fiction. It's the real deal, and an indictment against the prodigious printing press of the US Treasury.

The USDollar's decline

This economist sounds like an Elliott Wave loonie until you find out he's the Chief Strategist for the trading desk at Japan's 3rd largest bank, Sumitomo Mitsui (ed. I've have business transactions with Sumitomo before). He also has credibility as he correctly called the Dow Jones Industrials decline to the 6500 level, and the decline of the USDollar relative to the yen.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a_A5nqmw9Dq8

The tragedy becomes comedic when fringe politicians like Ron Paul end up prescient, despite being marginalized by mainstream economists.

IMF joining the liquidity party

The International Monetary Fund is now flooding global markets with liquidity, issuing Special Drawing Rights (SDR), which is basically a basket of the USDollar, the Euro, the Japanese Yen, and the Pound Sterling currencies. Due to liquidity exhaustion by the Fed, the IMF is now stepping up in its role as the international central bank, injecting SDR's into the global financial system. Is this inflationary? You decide.



Near the end of the interview, Rickards sums up well the disdain for gold from central bankers:

"The problem is: when you own gold, you're fighting every central bank in the world. Central banks hate gold, because it limits their ability to print money. But the market is the market; the market will do what it wants. Even the central banks are not bigger than the market."