What is next next

The falling yen coupled with a fall-off in Chinese investment inflows "increasingly resembles" the run-up to the 1997 currency crisis, said Albert Edwards, Societe Generale's ultra-bearish strategist.

"It seems investors may have forgotten that yen weakness was one of the immediate causes of the 1997 Asian currency crisis and Asia's subsequent economic collapse," Edwards wrote in a global strategy note on Wednesday.

Edwards, who recently returned from meeting clients in Hong Kong and Singapore, forecast the Bank of Japan will lose control of its recently launched program of aggressive monetary easing, leading to spiraling inflation and an increasingly unsustainable debt position.

Further explanations as below :-

If the market really believes the Bank of Japan is committed to the 2 percent inflation target (and I certainly do), then Japanese bond yields will quickly attempt a move above 2 percent," he said.

"If the Japanese government bond yield begins to rise, then an unsustainable debt position becomes even more obviously unsustainable and the government will be obliged to ramp up its quantitative easing operations to pin yields at low levels."

"I certainly expect accelerating quantitative easing to undermine the yen further, and the market to anticipate this," he added.

Edwards warned investors they should expect money to pour out of Japan in the same way it did after the BoJ's foreign exchange intervention in 2004.
"Who will be a beneficiary of this carry trade ? Probably high yield GIIPS [Greece, Italy, Ireland, Portugal and Spain] bond yields and the euro . And hence the periphery will appear to have been 'fixed'. Who will suffer? Germany, as the euro soars," he said
(Read More: Audacious BOJ Policy Sends Dollar, Euro Soaring )

A weak yen combined with deteriorating balance of payments situations in China and other major emerging markets is reminiscent of the mid-1990s, said Edwards.

"When I see a sharp rise in China' s real exchange rate and deteriorating Balance of Payment, it rings alarm bells. China is not the most vulnerable of the emerging markets currencies to a weak yen, but this conjunction could easily trigger a currency crisis as growth is crushed. High levels of foreign exchange reserves are no protection," Edwards added.


This post has been edited by SKY 1809: Apr 18 2013, 11:00 AM

I think of , to put some money to buy a bit of Japanese stocks instead

Affin is quite steady today

This post has been edited by SKY 1809: Apr 18 2013, 11:11 AM

EPF has a new CEO, what is his next plan for MBSB

Hard to have a US Currency Crisis no matter how , but Asia had one.

It does not mean history would not repeat itself

That could be offsetting in stock prices

I am curious why all mutual funds are more or less Ex Japan one

I am looking for mutual funds investing into Japan.

Lazy to do any researches for a small start up capital.

Plse suggest if u do have any good ones in mind.

This post has been edited by SKY 1809: Apr 18 2013, 11:32 AM

Good in what way ? gorengable

Hard to answer traders Q

Maybe Singapore should have....

Thanks

Bingo

Seriously, lot of cash damaging things happened in Bolehland.

Cash tight could come to Malaysia sooner than expected........

Thanks Guru Gark .

Can talk on on this fund, and any sites available

This post has been edited by SKY 1809: Apr 18 2013, 12:48 PM

I thought we have a fundsupermart in Malaysia

What is the diff bet Singapore and Malaysia one

This post has been edited by SKY 1809: Apr 18 2013, 12:52 PM

Malaysia one is kinda all Ex Japan funds

That is the beauty of operating a Supermarket Fund here, with limited choices.

This post has been edited by SKY 1809: Apr 18 2013, 12:55 PM

Then better call Funds Mini market

I do not see a high level of fund management here too, Kampung Standard maybe

This post has been edited by SKY 1809: Apr 18 2013, 12:59 PM

Quote of the month

Well done Bones.

Nice calls

Forumers love u

This post has been edited by SKY 1809: Apr 19 2013, 09:35 AM

It depends on what stocks u ride.

If u ride on Apple from US 600 all the way down, chance is that u might not see the us 600 again ( for a very long time )

In Bolehland, many stocks could be in super coma stage too , whether market is up or down.

And if u ride on reits all the way to 2% yield, then u are a super hero .

This post has been edited by SKY 1809: Apr 19 2013, 10:04 AM

Yes, exactly .

Holding on to MISC by Penang State turning out to be a loss too.

But if stocks appreciate 100 to 200 % gain a year or so , I see no point to fall in love with them and hold them forever.

Like Axreit ,up from rm 1 to rm 3.70, good to hold IT forever

This post has been edited by SKY 1809: Apr 19 2013, 11:19 AM