A contrarian’s wet dream? – Capitalist Exploits

Inflation Gold Energy EM Government Bonds

The title for the chapter on Japan is “A Bug in Search of a Windshield.” While the currency of the Land of the Rising Sun is very strong as we write, there are real structural reasons, as well as political ones, that lead us to predict that the yen will begin to weaken. At first, it will be gradual. But without real reform in government expenditure

Let us give you one scenario that worries us. Congress shows no discipline and lets the budget run through a few more trillion in the next two years. The Fed has been successful in reflating the economy after it has embarked on even more aggressive quantitative easing. The bond markets get very nervous, and longer-term rates start to rise. What lit