Why The Yen Is Collapsing

What is going to happen next? [image] [image] I sat and watched as beautiful wooden speedboats would cross the lake from Milan, Italy and dock at the dock directly in front of the Swiss bank I worked for in Lugano, Switzerland. The trip was relaxing. Never really any bad weather even in winter. Lugano actually has palm trees! The boats would dock at the wharf. Big suitcases would be unloaded from the boat onto the dock. A helper from the bank would cross the street from our bank to the dock. He would pick up the suitcases, one in each hand, and walk back across the dock, covered in a red carpet, across the street, where the red carpet would go from the street to the door of the bank. Just another Italian bringing cash to deposit in our bank! If tax evasion was an Olympic sport, the Italians would win the gold medal every games! I worked for several years as the treasurer of the fourth largest Swiss Bank and that bank mentioned above was my bank. What did we do with all that cash coming over in a flotilla of small boats? [Click here for information on the best weekly video newsletter the Wall Street Winner!]() A major part of my job was to invest the cash that the bank had. We literally had a flood of cash to invest everyday. Part of the job of a bank treasurer is to use that money to fund loans that the corporate loan officers made. Frankly, there were not a lot of opportunities for the loan officers to lend money in that part of Switzerland. It was too sleepy. So that gave me a large pot of money I had to invest and make money from the cash. Being a Swiss bank, we were very conservative and most of the portfolio was in money market instruments that matured within 90 days. But sometimes we would extend our maturities and lock in higher rates by buying longer dated government notes. There are three major things I had to consider when investing longer term. - The interest rate we would receive - Was the relevant bond market in a bull or bear market - Was the relevant currency in a bull or bear market Let me explain. The ULTIMATE Trading Education! Courtney Smith has put together an incredible site where he is brain dumping everything he knows about trading stocks and options. [Click here to learn more now!](=) Most of the time, the yield curve is positive so buying notes would pay more than buying short term bills. So far so good. But bills really have no price risk. You hold them to maturity and get your money back. But notes are different. We would have to hold them for 10 years to guarantee that we would get our money back. In the meantime, the price could go into a big bear market, like we are seeing now, and we would be making a higher interest rate but losing money on the note price. So that meant we wanted to buy only notes in bull markets But then we had to consider the currency. If we bought a Japanese note that passed the first two criteria but the yen was in a bear market then we could still lose money as the value of the bond went down because it was in yen and the yen was declining. So we also wanted to only invest in notes that were denominated in a currency that was appreciating. So where are we now? The chart above shows the yields of 10 year notes in various currencies. Notice that three of the four lines are moving sharply higher showing that rates in the US, UK, and Euros are going up. But the fourth line is interest rates in Japan which have barely moved. So a Japanese investor would make far more money investing in something other than in Japanese debt. And, remember, Japanese banks, insurers, the post office, and the government are massive holders of global long term debt. So they are seeing higher yields in the US and a much stronger dollar versus yen but the value of the notes are declining. Still, when you blend is all together, it makes sense for Japanese debt investors to sell their Japanese holdings, convert to dollars, and buy US debt. But notice that this starts a cycle that perpetuates the long dollar price action. So the conclusion is simple. Buy dollar/yen! Oh, and now you too can be a treasurer of a Swiss bank! Words To Live By "Perhaps the greatest danger in the application of the theory to speculation in stocks lies in the fact that the neophyte, having beginner’s luck, may arrive at correct conclusions several times and then, thinking that he has discovered a sure method of beating the market, read his signals wrong. Or, what is even worse, he may be right at the wrong time. In either of these events, the Dow theory is usually blamed, when the fault lies with the trader’s impatience." - Robert Rhea Hard to add to that except to say that he is talking about the Dow Theory but it applies to any profitable techniques. For years, we gave a money back guarantee on our courses. We said that if they followed the rules exactly for one year and didn't make money, we would refund their tuition. We only had a few people ask for their money back. So we would ask for a copy of their trades. I would look over them and very quickly could see that they didn't even come close to following the rules. NOT EVEN CLOSE! I'd point out several ways they didn't follow the rules in the first couple of weeks of their trading. They all quickly admitted that they actually never followed the rules. Nobody argued. They clearly saw that they failed to follow the rules. If you find a technique that your study shows you works, follow the rules! Don't deviate! Where to get more Courtney! Youtube: [Freebee Wall Street Winners]() Substack: [courtneysmith.substack.com](=) [Profile Image] COURTNEY SMITH WealthBuilder LLC Work (702) 761-6837 | Text Message (702) 718-8588 Support@WealthBuilderLLC.com CourtneySmith.com Share The Love If you like Trade Secrets, then please pass it on to your nearest and dearest so they can sign up too. If you believe in the power of good journalism, make it something you subscribe to. Sharing is caring. [image] 1. Get your Option Strategy Guide and 7 Option Top Trading Tactics.[Click here](=) 2. Health is very important at this time. Ian Cooper has a new report and LIVE trade sheet to learn which are the BEST Health care, Pharma, Biotech, Insurance Companies.[Click here](=) [image](=) [Unsubscribe]( WealthBuilder LLC 2340 Paseo Del Prado Suite D101 Las Vegas, Nevada 89102 United States (888) 464-8666