The Japanese yen just plunged to a 13-year low against the US dollar.
Japanese and US monetary policy are going in opposite directions. While the Fed is threatening to tighten, Japanese Prime Minister Shinzo Abe is deliberately debasing the yen. He’s hoping a weaker yen will kill deflation and jumpstart Japan’s economy.
So far, the weak yen hasn’t helped Japan’s real economy. Employment isn’t improving and wages aren’t rising. But it has turbocharged Japan’s stock market. The Nikkei is at a 15-year high.
A weak yen makes Japanese goods less expensive abroad. That’s why Japanese exporters like Toyota are earning record profits.
But there’s no free lunch. A weak yen hurts Japan’s competitors. That’s one reason why South Korean exports just collapsed the most since the financial crisis.
This is exactly what money expert Jim Rickards has been warning us about. A country can’t gain a trade advantage without hurting its neighbors. The Currency Wars are only going to get worse.
Doug Casey: Cuba Will Attract Investment… But There’s a Catch
The US and Cuba are making up. And it’s only a matter of time before the US ends its 50-year embargo against Cuba. That will create some serious investment opportunities.
But Doug Casey, chairman of Casey Research, says things will really explode when Cuba becomes legal for Americans.
Millions of gringos will vacation in Cuba every year. Why go to Florida when Cuba is just 90 miles offshore? Real estate developers will make a killing.
The bad news? The Cuban government is only allowing commercial investment… which means Americans can’t buy-and-hold the pristine beachfront property along Cuba’s 2,000-mile coast.
Gold: Time to Buy the Rumor?
Casey Research senior analyst Jeff Clark believes that a gold bull market is just around the corner.
In fact, Jeff’s so confident that he just bet economist Harry Dent two gold coins that gold won’t fall to $700/oz in the next two years.
Harry is a dyed-in-the-wool economist and numbers-junky. He thinks round two of the financial crisis will cause massive deflation and weigh on gold prices, until the next peak in commodity and gold prices in the late 2030s.
Jeff and Harry are both putting their own bullion on the line. Which headline will you read in early 2017: “Jeff Clark Wins Two Ounces of Gold,” or “Harry Dent Bests Gold Bull Jeff Clark”? Click here to get your free copy of Gold: Dead or Alive, and decide for yourself.
Blips & Bogeys
- Bond market illiquidity may be inevitable, even if the Fed doesn’t hike rates.
- Higher interest rates in the US are almost guaranteed if Greece defaults.
- Is the US in recession? Consumers are saving rather than spending. And new orders for consumer goods have crashed.
- Wall Street’s young traders are in for a rude awakening. They’ve never seen interest rates rise!