For the first time since 1995, the U.S. dollar traded at less than 100 yen today in Tokyo. It’s no coincidence that the Nikkei 225 fell 3.3% to 12,433. This is precisely the reason I’ve been bearish on Japanese stocks for some time now. Just last Friday I addressed it.
“The momentum is definitely downward for the dollar,” said Daisaku Ueno, senior economist at Nomura Securities Co. “With the momentum going like this, no one knows where it will stop.”
On the contrary, Ueno-san, I know somebody who has an idea. I found him on .
Marc Faber, editor of The Gloom, Doom and Boom Report, spoke in Los Angeles last Friday. He pointed out that all asset classes have risen since 2002, a situation that hasn’t been seen for 200 years.
“The current synchronized global economic boom and universal all-encompassing asset bubble will lead to a colossal bust,” he said.
He placed much of the blame on U.S. monetary policy, with its focus on consumption over capital infrastructure, and said to expect a long period of volatility with swings of 20% up and down.
Loose money and out-of-control debt have taken a toll on the U.S. economy. “Zero hour may have already arrived,” he said. He believes the U.S. has been in a recession for four months.
He was most pessimistic about the value of the dollar. He said, “In the long term, the dollar is a doomed currency. It will go to zero.”
It’s not at zero yet, but for the first time since 1995 the yen is at parity with the penny.
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