YEN-The killer currency

Would you buy my argument if i told you that YEN is the reason for financial unrest in the world???
Let me walk you through a term known as Yen Carry Trade.

Yen Carry trade:BOJ(Bank of Japan) till recently had negative interest rates!! can u beat that..what it actually means is that you have to pay intrest to the bank for keeping money!!So how is it so fascinating..BOJ gives loans at every low interest rates.So what traders(Foreign Instituional investors(FIIs) and Hedge Funds) do is that they take borrow money from BOJ at a lower interest rate and invest it in emerging markets lik India,Russia and China.The returns that they get by investing this money in emerging markets/US treasury bonds/bills is huge.Its not fair but its an handsome ROI(return on invesment).

Now Now..there is a catch here..all is fine till the interest rates of BOJ and YEN remains steady(historically it has been thats y lot of big firms take loans from BOJ..tata-corus deal is an yen deal for eg)What if BOJ raises interrest rates..or what if YEN appreciates to the dollar..what will happen in such an scenario..money will start flowing out of emerging markets where FIIs/Hedge Funds have invested in.If you closely follow the INR-YEN-USD equation..you wil realise it holds a secret on how markets will perform in short term.


Bad Economics:
Rarely does it happens in fianancial markets that equity and commodity markets follow a parellel path.
Both move in diametrically opposite paths.Recently what we are seeing is commodity prices increasing and equity prices shooting up.
a week before equities were moving down and so was crude..its a bit wierd.Whats even interesting is that dollar has appreciated against the rupee..moreover when there is financial turmoil as in US. Ideally speaking dollar should have plunged.There is some rigging happening USD.Either it is US or some economies which have vested intrest in Dollar being steady supporting the Dollar..but trust me its not goin to last for long...you can support for sometime..you can come up with stop gap solutions..but if fundamental problems are not being addressed things r goin to come haunting back..with even more ugly faces.

In months to come dollar will plunge.Mark my words.Be long on gold..in tough times lik this you bet on something which has intrinsic value.If US congress approves their plan bail out the so called Toxic or Bad-Debts using american tax payers money...god save america.
Normally when u print currencies you keep some securities against it.Gold is the best bet.Clandestine sources confirm that US is printing dollars with minimum security in times of crisis.Pound has corrected..Dollar will go down..Yen will appreciate spelling doom..beware YEN is coming!!