72-Year-Old "Mad Dog" Wakabayashi "Warns Reversals Will Be Massive In Scope"

[TheWPCTraveler]

danielrdp said:

TheWPCTraveler said:

What phrase? A reversal is just, well, a reversal in trend, I believe.

Nope, not a phrase or a word, I meant the whole article. I understood what's written. However I don't know what that would mean for the global economy. My English is alright, I just chose Arts instead of a boring A-level Economics course, so I lack enough knowledge to fully understand the magnitude of his warning.  

 

e.g. If the Yen is strong that would mean that Nintendo and Sony would have their profits reduced, as a result their stocks would fall, not rise as Teeqoz said.  

Please take note that this is what happens on paper, according to theories perpetuated by economists :^)

Wakabayashi specializes in chart-based market analysis, which is analyzing the market using...the charts - the graphical ones. I believe a more obtuse term is "technical analysis."

Ooh boy, now here comes the hard part.

You may note that there is all this "drama" about the federal Reserve Bank of the United States raising interest rates, right? This makes it more worth the risk to lend in US dollars (since you may be living in a country where there is, say, lending at a lower interest rate). At the same time, it makes it harder to borrow in US dollars, since you'll have to pay more in interest (this discourages people from borrowing in USD, and just using that to buy their own currencies). In other words, demand for the US dollar will rise - since people will want to lend using it or invest in USD - and supply relative to other currencies will fall - since borrowing to buy your own currencies will be more expensive, and you are in fact selling USD to buy other currencies.

That should explain why Japanese Yen will increase in value compared to US dollar.

About that stock bit, you could just take a look at what happened in China earlier this year to see that intervention changes the outcome only slightly.

And, well, you can ignore the bit I said earlier, Teeqoz mentioned to me how the strong yen is actually hurting Sony.