Sometimes I wonder if the currency traders of the world ever really look at the fundamentals of a currency pair.

I know that the US dollar is heading for the trash heap. BUT, the Japanese yen is already there. And yet, the yen is making a strong move against the dollar – as are all the major currencies.

We (the USA) are up to our eyeballs in debt and any sensible person with a modicum of financial knowledge knows we will never be able to pay off our debt – it will have to be monetized. But the Japanese make us look like astute currency managers. Japan is more than twice as indebted as the USA – and the printing presses are running full speed ahead as we speak. Pretty soon, at the current rate, the Bank of Japan will own all of its government debt and most of its stock market! If that sounds strange to you, it should. It is truly crazy.

But not as crazy as those currency traders that keep thinking about the yen as a safe haven currency.

For the record, I am long USD/JPY at the moment and I am a bit pissed at the illogical situation. But I am a big boy and will trade my way out of this insanity – one way or another.



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