Hi DazedandConfused and Timber. It's certainly not something I...

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trombone

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02/11/14

00:23

Post #: 14222773
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Originally posted by Dazedandconfused ↑

Personally, I have been puzzlingly over this for the last 2 days and I still can not make sense of it.

Japan was already printing money, this last announcement means they will be printing about 20% more. The new total of Japanese QE is about $US750 billion which is roughly the same number the Fed was doing at the peak of their QE [80 billion/month]. The Japanese pension fund is going to unload Govt bonds [which apparently will all be bought by the BoJ] and will use the cash to buy stocks. ..... OK? so far so good ... easy to see why the Nikkei heads north [and to some extent the DOW et al]

But I start to lose it from here on.....

A weaker yen is bad for the $US .... Japan is exporting deflation to the US
A weaker Yen is bad for China .... China is already angry with Japan for their policy of driving the Yen down.
The current level of the Yen is driving many Japanese businesses to the wall as it is ... energy input costs etc. ....

Gold goes down (?) in leaps and bounds on the back of this announcement?? [when I was offered the choice between the RED pill and the BLUE pill nobody told me about the PURPLE pill which clearly was the right one to take.]

I don't get it. The BoJ will now be effectively monetizing all Japanese government debt. Everything goes onto the tab. Credit with absolutely no collateral ..... and gold goes down???

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Hi DazedandConfused and Timber.

It's certainly not something I have picked up but it has been pointed out by others that there has been a strong correlation between the moves down in Gold and the Yen. There is a very recent article with charts here :

http://rambus1.com/?p=28447

Take a look !!

I don't keep abreast of financial news at all times so was not aware the BOJ have pumped some new QE. My guess is this will weaken the Yen, which will strengthen the $US index which will put heat on gold.

There is another maybe less enlightening article I fished out the other day here :

http://www.cnbc.com/id/100803556#.
4 Upvote

0 Great analysis

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