HotcopperinvestorIm always trading the USD vs AUD I need to...

Hotcopperinvestor

Im always trading the USD vs AUD I need to because my business is 90% supplied by USD based suppliers, all my supply contracts are USD denominated, so if the AUD weakens and Im not hedged Im toast , so yes its part of my game

Twinsen

Just under 50% of the bond market is denominated in USD, another 20% is YEN. About 40% of European debt market at USD bonds. Think of deflation as a shortage of cash and inflation as an over supply

In a debt default environment there is a shortage of cash, if players cannot borrow it then they have to sell assets to avoid default. As players start to default it liqidates the reserves of the lends, all QE is an attmept by the central banks to refresh those reserves by buy the bad loans from the banks, which allows them to lend more, if 5 % of a banks customers default it wipes their entire reserves, some lenders are leveraged 100 to 1, so just a 1% default can wipe out the reserves.

Bernanke is very good at talking up his own actions, QE has become a myth (and thats intentional) the Fed and all the other central banks want us to think they can inflate at their behest, its pure propaganda, QE is failing, both QE 1 and 2 have failed , sure they gave us a lift but they basically burnt 10 trillion, they wont do that again and if they do it will be only once so the informed players can get set for the market take down.