News: NST Commodity stocks drag Australian shares; RBA holds rates steady, page-11

Just another day, with the mad hatters' and their markets..
It has often been said that we will know when we are on the cusp of intense change, when the Saudis abandon the petro-dollar, and the Yen carry trade collapses. 'Business as usual, will then no longer apply'.

'Gold seems to have had a hard time finding a home on financial statements the past decade. With the Treasury,

it's alleged to be held in the vault yet leased simultaneously. The Treasury treatment is analogous to reporting cash

and accounts receivable on the same line item. Try this with a small business, and one might go to jail.'

https://www.zerohedge.com/markets/petrodollar-endgame-moves-even-closer

“The OPEC members decided in 1973/4 to price all oil sales in US dollars and invest any excess in US Treasury bonds in exchange for US military protection. This is how the petrodollar system got its start, and for the last 50 years, due to this arrangement has created a ‘synthetic’ demand for the dollar, and established the US dollar as the benchmark for oil trade globally,” he explained tome.

“What'll really be frightening,”he said, “is what happens when Saudi Arabia and the rest of OPEC follow suit and move officially away from the dollar as sole settlement for oil, as I have been predicting for 4 years in over 1,200 YouTube videos.”

“Imagine what the world would look like if all the nations that have been forced to hoard dollars for the past 50years in order to buy oil suddenly had no reason to do so and were dumping dollars. The immediate horrific economic ramifications to the United States is precisely the thing that should worry every American to no end. It worries me, does it worry you? It should!”

The Yen carry trade seems to be a Japanese suicide mission, designed to protect the US dollar, at the price of the Japanese economy. However,Japan is now in a desperate debt situation, and something will have to change.

https://www.reuters.com/breakingviews/forex-swings-will-upend-lucrative-yen-carry-trade-2023-12-01/

In recent decades, Japan has been a graveyard for investors looking for domestic returns. Notably those who bet against its government bonds in a trade so bad it became known as the “widow maker”. Foreign exchange traders beg to differ: the carry trade has been a sure-fire money maker this year.That’s due to the huge gap in short-term interest rates between Japan, where they are -0.1%, and other countries.

The most popular carry trade with yen has been into U.S. dollars . That’s because the Federal Reserve has pushed the benchmark federal funds rate to 5.25% to 5.5% – the highest level in 17 years – to slay inflation. More daring investors have placed their borrowed yen in emerging markets such as Colombia, where rates are 13.25%, Mexico,where borrowing costs are 11.25%, or Brazil, where the overnight rate is 12.15%.