Oct 21, 2022
VOT Research Desk
We might be on the edge of yet another significant Central Bank intervention after an already eventful start to the fourth quarter, just when traders thought things couldn’t get any more dramatic.
As traders are well aware, any announcement of a significant change in monetary policy from one of the Big 4 Central Banks has the ability to affect the markets considerably and should not be undervalued. After the yen fell through the crucial psychological threshold of 150 to the dollar on Thursday, Japanese officials once again threatened to intervene.
This put markets on high alert that a conflict to devalue the dollar, and maybe the formation of a new currency war itself, is now obvious.
The Japanese yen dropped below the highly significant 150-mark in relation to the US dollar, taking it to its lowest point since August 1990.
The most recent decrease occurred as the Bank of Japan was getting ready to start an emergency quantitative easing program which would include buying 250 billion yen ($1.7 billion USD) worth of government debt in an effort to hold down yields even while long-term interest rates rose throughout the world.
The yen has lost almost 30% of its value against the dollar so far this year, despite a $20 billion intervention in September, as a result of the growing disparity between the Bank of Japan’s ultra-loose monetary policy and the tightening by the majority of other major central banks, most notably the Federal Reserve.
This much anticipated action by the Bank of Japan comes only a few weeks after the Bank of England resumed historically large-scale Quantitative Easing operations in an effort to prevent a complete collapse of the world financial system.
The Bank of England recently announced that it was resuming its money-printing machines at “whatever scale is necessary in one of the biggest U-turns in monetary policy that has ever been witnessed, formally declaring that QE To Infinity was back. This was little over three weeks ago.
Following the Bank of England’s announcement, prices for over 27 commodities, including lumber, crude oil, natural gas, gold, silver, platinum, palladium, platinum, aluminum, and copper, soared to multi-month highs. Many of these commodities also registered impressive double-digit gains in a matter of days. The positive trend also spread to commodities priced in British Pounds, such as Gold, Silver, and others, which caused them to soar to all-time highs.
And just when we thought the good times were ended, the Bank of England was compelled to intervene once more this week with more quantitative easing measures.
Many other central banks may eventually be forced to repeat the actions of the Bank of England and Bank of Japan by restarting their money-printing apparatuses and injecting enormous amounts of liquidity into an already inflationary atmosphere. We are currently seeing one of the largest wealth transfers ever in history as traders. Exceptional times bring up extraordinary opportunity.
There is no better moment than the present if you actually want to accumulate cash that will change your life!
