Dollar Yen Pierces Long-Term Downtrend Line

Our friends over at Lighthouse Securities posted a nice chart and great analysis on today’s $/Yen’s break of its two-year downtrend line.    We’re sensing this could be one of the big macro trades of 2012.

As Europe works through their debt crisis the hunt will be on for the next vulnerable sovereign.  Remember, it’s all about confidence and if the Japanese financial institutions, who own most of the JGBs,  doubt the government’s debt servicing capacity,  it’s game over and sayonara, Mr. Yen.

The Bank of Japan will be forced to turn on the firehose and monetize the government’s debt is a humungo way.     Those who have tried this trade before have ended up with their family jewels caught in the walnut grinder, however.

Maybe…………………ummmm…………dare we say, “this time is different?”   Maybe.

P.S..   Have ’bout them Apples?  What a company!

(click here if chart is not observable)

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