The Phaserl


Gold: Tactics For Bull Era Fun

by Stewart Thomson , GoldSeek:

All institutional analyst eyes are on this week’s central bank announcements from Japan and America.  Most gold community analysts seem to have a difficult time grasping the idea that Japan’s fiat currency is viewed by top FOREX money managers as a safe haven, albeit less of one than gold.

  1. The Japanese government is a huge debtor, but the citizens are even bigger creditors,and the bottom line is that the weakness of the debtors is superseded by the strength of the creditors.
  2. It’s possible that the Bank of Japan fires a “bazooka” this week, but how that will affect the Japanese stock market, the dollar-yen trade, and gold… is unknown.

Goldman Sachs analysts believe that a Kuroda bazooka shot will strengthen the dollar and make the Japanese stock market surge higher.

  1. In contrast, Morgan Stanley believes the bazooka shot will have the opposite effect; the Japanese stock market rally will fail, and the dollar will fall against the yen.
  2. On that note, please click here now. For more detail on Morgan Stanley’s view, please click here now. I think Morgan Stanley’s team will likely prevail.  Here’s why:
  3. Kuroda is attempting to send the stock market higher just as the seasonally weak month of May arrives, and that’s a tall order, especially when powerful money managers at Morgan Stanley are going to use any strength to exit the market.
  4. The US central bank is also in an interesting position right now.  The NIRP policies adopted by Japan and Europe are viewed as failures by more and more top money managers around the world, yet just one small US rate hike caused a huge global stock market sell-off, and a safe haven surge into the yen and gold.
  5. If Janet Yellen raises rates at any time this year, an even bigger global stock market tumble than the last one is likely.  If she leaves rates unchanged, or joins “Team NIRP” and actually cuts rates, it could cause a loss of confidence event with central banks in general, and an enormous institutional gold buying binge is quite likely to happen.

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