Saturday, September 29, 2012

Japanese are ready with QE as well

Japanese Yen is ready 

for Quantitative Easing 

as well------By Shan Saeed

Ben Bernanke formula QE--Quantitative Easing is going global. Japanese, 
Europeans and British are following him. I was the first one who informed
 last year that QE will go global and many advance economies would adopt
 QE in order to spur growth and stimulate the GDP rate. Just look at Japanese, 
the country is adopting QE in her market. The global economy is in the midst 
of printing money and this will eventually give rise to gold and other real 
assets going forward. Investors need to critically analyse their assets and 
pre-position audit of their portfolio for asset and wealth protection. 
Japan's Debt to GDP is 227%, no real plan to pay down this debt, 
interest rates near zero, close to zero economic growth for the past 
20 years and horrible demographics making it difficult to grow, 
would you buy buying the currency of this country? Throw on top 
of all this that the country is trying wildly to devalue its currency, 
now would any investor buy?. Japan recently announced it is expanding 
its quantitative easing program by 10 trillion yen to 55 trillion yen 
(something in the $120 billion range).  The Japanese have stated over 
and over again during the past year that they want to devalue the yen, 
which is trading near all-time highs. In the foreseeable future, Yen 
will be in the range of 95-100. At present, Yen stands at 80 against USD. 

Part of the problem is most of the currencies around the world 

are just as bad. Europe is going to enter a recession and has huge 
debt and banking woes, and the United States is printing money 
and spending like a drunken sailor. Therefore, Japan is a total 
fiscal basket case and cannot devalue its currency! 

With the major global economies printing money Real Assets 
like Gold and Silver will rise in value against all of the currencies. 
What will happen is the yen, dollar and euro will remain in trading 
ranges against each other, but all will fall in value in terms of gold.
The yen’s inability to devalue against other paper currencies despite 
being so fundamentally weak is just another argument to invest in 
gold and other real asset stocks going forward. Happy investment in 
the global financial market. 

Disclaimer: This is just my research piece and not an investment advice. All financial transactions carry a RISK

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