Aug. 6 at 1:52 PM
$GOLD $AAAU $GOLY … So, what's in store for gold in today's growing global geopolitical & monetary uncertainty? Guessing the Japan's yen summer collapse (now trading at its weakest level vs the USD in four decades) and the Fed's Warsh just told us.
The reason the Japanese yen has fallen and continues to do so, is the direct result of decades of extreme money printing, repressed interest rates and a debt/GDP ratio that brings more than tears to the eyes. (Sound familiar?)
Japan's latest finance minister (the 22nd since 1990) tried to save the yen with
$73B worth of currency support (thanks to a massive Japanese sale of USTs). But that strategy clearly failed.
Equally unsuccessful was Tokyo's attempt to raise interest rates to a whopping 1% in June (the highest levels seen since the 1990s). Which was pathetic given that Tokyo has been running zero to even negative rates for decades.
Conclusion: The Carry Trade is on life-support currently!