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flashrob
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a. air freight and logistics supervisor... airline and freight forwarder b. above elec engineering level PROPOSAL ANALYST for defense contractor c. high tech hdwr and software sales... networking "sales to gov and big companies, school systems, etc. d. worked for shop-rite and target...... More
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  • GOLD ...Japan, European Union, the U.S. ...emerging mkts... where WE'RE HEADED... 0 comments
    Dec 5, 2011 6:50 AM | about stocks: GLD
    ...Japan...here's reality...
     
    Japan will also have to "print money" just like the U.S. and Europe...
     
    1.  the Japanese gov needs a "cheap yen"  to jump-start their "export economy"...which has greatly suffered due to the "yen" ERRONEOUSLY being perceived, mostly historically, as a "safe haven" currency...THIS IS OVER...
     
    THE YEN is a bad play...which was viewed as a "safe haven" play, mainly, because the Japanese Banks are in much better shape then those in Europe and the U.S. (because they don't have nearly as much "bad real estate paper" on their balance sheets)...also, because the Japanese are seen as having "more integrity" by those in power/banking/politics than their counterparts in Europe and the U.S.
     
    a.  Japan is "very dependent" on "the price of oil" ...unlike the U.S. and Europe ...they have to import nearly 100%...and the "price of oil" ...their mfr expenses will continue to rise in a "world economy recovery mode..." putting further "downward pressure on the yen" and the Japanese economy...
     
    b.  the Japanese themselves, "want the yen" to go down for export reasons... so they will increasingly  employ measures to make this happen...mostly "yen dilution printing..."
     
    c.  the Japanese have an aging population... they historically take good care of their people... but increasingly chase "cheap labor" offshore, and therefore, increasingly do "offshore mfr" because of this... but that results in increased "unemployment for Japanese citizens in Japan"....so they WILL HAVE TO SUPPORT their own people...the situation is similar to the U.S. ...where we exported many jobs overseas, by our multinationals chasing "cheap labor" around the globe...and NOW we have "huge numbers of unemployed" ...who will REMAIN unemployed...because you can't bring those jobs (that these unemployed are only qualified to do)...BACK!"  
     
    So, like in the U.S. ...unemployment benefits and social programs WILL INCREASINGLY have to be funded "at gov printing money expense" to TAKE CARE OF AN INCREASING POPULATION ...of "permanently" unemployable citizens...this applies to the U.S. also...LESS SO IN EUROPE...because they don't IMPORT anywhere  near as much as the U.S. ...there are limits on the amount of Toyotas, for example, imported into Europe, but look at the amounts imported or "manufacture here" in the U.S.  
     
    ...SO THE EURO will DO LOTS BETTER against the DOLLAR... somewhat because of that...and also because of... EUROPE CENTRAL BANK FUNDING backstopping ... which looks INCREASINGLY likely 
     
    ...the last impediment for the EURO getting stabilized ...is Merkel's austerity/control demands ...which LOOK LIKELY SHE WILL GET "SOME OF THAT"...also, Germany will NOT LET THE EURO COLLAPSE...so it is STILL THE BEST BET...
     
    (china juan/renminbi would be a great play...but THE CHINESE... to protect their export mkt...will not let it rise...) so there is no good currency play there...)
     
    d.  JAPAN also SITs ON THE RING OF FIRE... more severe earthquakes likely...and the disruptions will exert huge downward pressure on the yen...because mfr on their "island" will be disrupted, plus gov expenditures for "disaster relief," etc....(we have Calif and the midwest...but OUR WHOLE COUNTRY IS NOT AT RISK if earthquakes get nasty...Japan could LOSE IT ALL, etc.
     
    e.  Fukushima... is "far worse" than they let on...so even with "no further" natural disaster stuff... the Japanese are going to have increasing difficult and very expensive government spending to cover THE COSTS OF THAT... which is still ongoing...but only de-emphasized and downplayed  by their gov
     
    so those are some of the "main reasons" why the YEN is increasingly a POOR SAFE HAVEN PLAY...
     
    EURO still looks best to me...but Euro/Yen/Dollar ALL WEAKEN against EMERGING MARKET CURRENCIES...mainly due to "massive inflationary printing" in U.S./EU/Japan...where WE KNOW LONGER PRODUCE MUCH (except for our overseas multinationals ...like IBM, Caterpillar, YUM, etc.
     
    the "emerging mkts"  essentially don't "have to print money" to  SUPPORT/BACKSTOP INCREASINGLY UNPRODUCTIVE DOMESTIC POPULATIONS"
     
    so...both the Euro and Dollar ...though classically on a "seesaw" versus one another matter less ...SINCE NOW... THE WHOLE SEESAW, they are juxtaposed on,  is "going down increasingly" against a "basket of emerging mkt currencies"
     
    SO:  DOLLAR DOWN...EURO DOWN (though less than dollar)...and YEN down, too...
     
    that's about it IN REALITY...
     
    FLASHROB
     
    PS..."GOLD" IS THE "BEST BET" in ALL this THAT IS UNFOLDING/HAPPENING...


    Disclosure: I am long GOLD.
    Stocks: GLD
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