I’ve been saying for a long while now that the only two things that made sense to me in this market were the Japanese Yen and shiny metals.

It looks like that is going to change soon as the carry trade unwinds and Japanese pensioners remove their money from non Japanese markets.

It looks like the Japanese were supporting many markets through their provision of extremely low interest rates. Now the markets are determining that this economy that has been in the same mess the rest of the world just stepped into is the best equipped to hold their funds?

Interesting days indeed.

I still find the “flight to quality” in the US peso to be something viewed askance because the colossal problems the US economy is just now starting to experience.

Personally speaking without any real numbers to back it up – I expect that [[UUP]] will go on a tear for perhaps three to six months and then fall in such a calamitous way that the sound will be heard round the world.

Why?

Taleb’s “the market takes the path to cause the most pain to the most investors” is why. There is nothing else going on in the market these days except attempted flight from one deflating bubble to the search for the next bubble.

All those “business fundamentals” I learned in Econ 101 have been long thrown out the window.

Examples:

The rest of the world is telling the second largest economy to devalue their currency.

The Europeans and Asia are seeking stronger ties. (More of a wtf than anything else)

Articles that say: Trading in U.S. index futures suggested Wall Street stocks would fall about 4 percent at the start of trading in New York.

The price of oil loses two thirds of it’s value faster than it gained it.
The Takeaway

I wish I could say I still like [[FXY]] but one has to be very careful out there with central bankers all ganging up on the only country that a) avoided the sub-prime fiasco and b) started reducing it’s US debt exposure a year ago. Somehow they ended up being the bad guys.

So – [[DXD]] it is with shiny metals on the side.

Anyone who is questioning [[GLD]] needs to take the last six month slide in the Dow components and compare it to the fall in [[GLD]] prices. For my opinion – the one that fell the least is the better pick.

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