http://www.theage.com.au/business/markets/dollar-soars-as-g7-sells-yen-20110318-1bzoc.html Basically selling yen reserves. More importantly, stating that they are going to sell yen reserves. Just the statement will make speculators flee the market and cause the yen to fall, which is the desired outcome. Yen's been rising like crazy as Japanese investors sell foreign investments and bring the money home, driving up the demand for the yen... or speculators buying up yen in anticipation of Japanese investors selling foreign investments and bringing the money home!
Please do not use the media word "intervention" as this incorrectly describes what is happening. "Manipulation" is the correct word !!!! Every time you see the word 'intervention' in the reports, substitute it with 'manipulation' and you will understand what is going on.
exactly..... basically goldman sachs has found a way to make a buck. ---> gets "world body" (hah... they still believe that shit)... to say something
It sort of depends on whether you consider "manipulation" to be a dirty word or not. I'm currently "manipulating" my keyboard in typing this post. If intervening/manipulating the value of the yen means the world doesn't go into a major recession, that would be a reasonably good outcome, right?
Hmmm AD, so we must differentiate between "underhand manipulation" and in your case 'physical manipulation' (no offence intended) http://en.wikipedia.org/wiki/Manipulation As to your question, right, only if you believe that Governments can fix it. Why not let the government manipulate everything, then we can all live happily ever after. "Market manipulation describes a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a security, commodity or currency.[1] Market manipulation is prohibited in the United States under Section 9(a)(2)[2] of the Securities Exchange Act of 1934, and in Australia under Section s 1041A of the Corporations Act 2001. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradeable security."
...and I'm pretty sure that central banks are exempted from laws designed to restrict corporations, so the point is moot. Its not such a bad thing - the main factor in keeping the "global recovery" going is large economies' ability to absorb newly created U.S. debt. If Japan starts dumping U.S. debt to buy back yen so they can rebuild, the market for U.S. debt gets flooded. Everyone holding U.S. debt sees a decrease in the value of their U.S. investments and the U.S. can't sell any more of it. The U.S. goes into recession and the rest of the world follows it because they can't trade as much with the U.S. and they can't free up funds by selling their U.S. debt because the price is depressed.
Yes GP, was aware that you were quoting an article, I was just proposing using the word 'manipulation' as a mental exercise every time you see the word intervention, makes the understanding simpler. "It gets even more hilarious. For the best part of two years now, the US government has been chastising China for "manipulating" their currency to keep it from rising against the US Dollar to the extent that it "ought" to. Here's what Japanese Finance Minister said when he was interviewed in Tokyo on March 18. "We won't manipulate it, but we hope that the Yen goes back to where it was before the earthquake." When the Chinese central bank buys Dollars to slow any rise in the Yuan (and to allow the US Congress to go on spending), this is called "manipulation". When the G-7 gets together to sell Yen, it is nothing like that. And besides, it was NECESSARY to force the Yen down. To do nothing would have risked the global carry trade and without that, nobody but governments would be borrowing any money at all. And what would THAT have done to the global credit-based monetary system?" Quote from 'The Privateer" (subscription required)
