what to do now: cash or invest, page-4

Gerry
I feel that to try and isolate/analyse one factor as to the influencing factor on global capital flows is fraught with danger.

The press financial journo’s. who by and large have no idea merely jump on the latest theory and write it up from there. From personal experience the journo’s do their ring around of contacts to seek info and use creative journalism from there on.

Reality is the Yen carry trade has been a factor in capital flows for over 20 years – in the big picture it has no more influence now than in the past.

Naturally CB’s are going to accommodate short term demands in the markets, after all that is one of their primary roles.

As for BOJ wanting a weak/strong currency, this is fanciful thinking on the part of analysts. Again, reality is that the BOJ cannot influence the medium/longer term trend of the currency. I have witnessed days when BOJ has intervened to the extent of $15bio on a single day – with no material effect on the medium term USD/JPY exchange rate.
(aside from that, the REAL influence on the Japanese economy is not the BOJ, rather MITI).

As to your header: “what to do now: cash or invest” That all depends on your time horizon.

If you are in there for the long haul (such as SMSF), then go for commodities. If you are worried about the short term fluctuations (which are here for a while yet) then stick half in cash.