Japanese Central Bank Sells Yen/Buys Dollar

Well I knew that by playing it safe and adding shares yesterday would trigger a move in forex favoring the dollar, it not superstitious but I’ll be damned if something like this doesn’t happen every time <_<

The good news for us is that in any case, gold and silver are still trading pretty much sideways today, both are up by a handful of cents each which is a strong bullish signal for the both of them as even though the dollar just moved back to a three or four week high, we’re still holding on to yesterday’s gains. I really like this move because it shows that investors are ready and better prepared this time around, this is not going to be another 2008 because there is a lot more money in the system and people are starting to realise that gold is not just a dollar play anymore. They understand that when the dollar index goes up it’s not necessarily an indicator that the dollar is stronger, all you have to do is price it in gold and you see just how weak it actually is. The same goes for every other currency, especially the asian markets who seem to be buying up gold and silver as hedges against the race to debase.

I think that the past two weeks have been one of the most important tests that we have had since 2008 and so far we’ve had silver make it’s move into becoming a monetary metal again and showing that it can stay above $20 for more than a day or two, and both gold and silver standing up to the forex market by being able to hang in there despite a huge move into the dollar by the Bank of Japan. We still have some technical hurdles to get over like $21 silver, as well as if and when equities get into a messy situation again like DOW 9,000. If we can hold through the next few months of “deflationary” economic data I’d say that the gloves are off and it’s time to go all in.

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About Aaron Basile
Market Technician, Equity/Commodity Trader, Austrian Economist, Contrarian Investor

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