Gold decouples from dollar and continues to soar

Arrigato Gozaimasu


The last time that the U.S. dollar leaped by nearly 1.10 on the trade weighted index in a matter of minutes was…well, it is difficult to summon up that memory. A “Thank you, Bank of Japan” card will be on Mr. Geithner’s to-do list later today. Enough was enough for the BoJ and it set out to sell the stuffing out of the yen (and buy dollars in a big way) overnight as it also pledged to give the Japanese economy a ten trillion yen adrenaline injection to come.



The latter country did manage to pass a relatively tough debt test today as it auctioned nearly $5 billion worth of bonds; but, it had to do so at a price. That “price” was the highest yield (4.8% and 4.9%) for said (2014 and 2015-dated) bonds since the birth of the common currency more than a decade ago. Demand for the obligations was termed as “decent.” The yields, on the other hand, appear “indecent” but, hey, what a (certain PIIGS) country to do if it wants to sell that paper? Pay up, that’s what.


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