The Bank of Japan stepped into the Forex markets overnight in an attempt to punish the impertinent speculators who have dared to nullify their former intervention efforts undertaken back earlier this year when the nation suffered the onslaught of the earthquake/tsunami.
Note the previous intervention, which I might add was a VERY RARE example of COORDINATED CENTRAL BANK EFFORTS involving the BOJ, the ECB and the FED. If intervention is going to be effective, it will generally need to be coordinated, sustained and have an eventual fundamental backing. Without those factors, it always ends up being a gigantic waste of money.
Note that even this coordinated intervention failed to stem the advance of the Yen. Now are we to believe that the Lone Ranger effort by the Bank of Japan this time around is going to be successful? Hardly. They have bought a bit of time but all that will happen is that speculators will use the intervention to step in on the buy side of the Yen and get it at a lower level.
In the process of intervening however, the Bank of Japan is devaluing the Yen when measured against Gold. Gold still remains a store of value protecting those who own it against the depradations of their own monetary authorities.
Dan, thank you for your insight on this one!
ReplyDeleteIt seems to me the various money-miesters are posturing each other and occasionally pushing each other around in a futile effort to establish the value of all the different pieces of paper. I don't think it can be done. We’ll see.
It’s a good time to buy the metals…
they're piling into the glue-factory one after another....taking turns now.
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