SCENARIO 1: EVERYTHING hinges on the carry trade. If USDJPY goes down, so will yields - making inflation higher and commodities will boom. Of course this is a mistake and Japan (and the whole world) will feel the effects off inflation here since DXY will plummet also to 97. Then when everyone blows up in the summer sparking a u-turn and the FED realizes inflation reignited, the FED will be forced to hike rates, as the BOJ goes back to negative interest rates. This will spark the largest explosion of currencies as the DXY goes to 140-160+ - blowing up last in the process. This will give central bankers the opportunity to bring out CBDC's as they go negative interest rates hinged on social credit scores. That's unless Donald Trump can overcome all the cheating and banana republic shenanigans (arrest or assassination). If he is able to become president then he will move the USA back to a gold standard when everyone else (BRICS) is being forced to swear fealty to a digital yuan (remnimbi) that's backed by social credit scores.
SCENARIO 2: IF the FED goes hawkish, that will spark the blowup in currencies and markets, forcing silver down before catapulting when the FED erases interest rates, but I believe we are in for scenario 1.
הערה
PCE inflation comes out on Friday when the markets are closed the FED chairman Powell is speaking. It won't matter if he is dovish or hawkish because the BOJ is going to start selling treasuries to defend their currency which will push down yields, causing inflation to hit the dollar, pushing USDJPY down and pushing up commodities. If Powell is hawkish then we could get one more bump down to 22 area before rocketing after the BOJ takes action.
Is great weekend reading that covers all the major players and their potential chess moves. It weighs possible moves and gives you a clear outlook of the market dynamics right now.
הערה
Silver hit $30 in China session!! That's $2 or 10% in one night!!
Will Korea and Japan's Plaza Accord spur a Chinese devaluation? Yes if they actually do it. It won't work for long as the dollar will come roaring back as everyone defaults from hyperinflation. Ultimately I see 250 for the Yen, the Yuan will be 8-10 by the end of the year. This means that the dollar will lose ground before skyrocketing - which'll boost metals and miners to ATH's. But when the dollar comes back because of some deflationary catalyst and dollar shortage, risk assets will lose value cause no one will have enough dollars.
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