The Yen broke 100 to the US dollar today. That is a 'big deal' in forex circles.
David Rosenberg thinks that:
"We currently are witnessing the Potemkin rally. For a quick background the phrase Potemkin villages was originally used to describe a fake village, built only to impress. According to the story, Russian minister Grigory Potemkin who led the Crimean military campaign erected fake settlements along the banks of the Dnieper River in order to fool Empress Catherine II during her visit to Crimea in 1787..There has been little or no mention of or word out of the G20 conference in Turkey about 'Reinventing Bretton Woods.' I have been talking about this for some time and linked to the original agenda when it first came out. I reminded you of it a couple of weeks ago. But there is little heard about it so far.
The term, however, is now used, typically in politics and economics, to describe any construction (literal or figurative) built solely to deceive others into thinking that some situation is better than it really is.."
Ben Bernanke, recently proclaimed “The Hero” by Atlantic Magazine, is the “Wizard of Potemkin.”
The G7 did call a special meeting for this weekend to discuss serious bank reform. The Bankers were not pleased with this, but apparently had no choice. And some were not happy with having to make all the last minute arrangements for this august gathering of central bankers and finance ministers.
The G7 tried to spin this as a late reaction to Cyprus, but that is what the Brits like to call 'bollocks.'
It is said to be a response to a request from China and Russia and a few associates for the G7 to get their dirty financial house in order. Cyprus was the last straw in a series of outrages. Europe is none too pleased with having been sold all that dirty paper in the last bubble. We already knew that from Jeffrey Sachs talk to the Philly Fed last month.
And as always, gold is talked about in whispers.
"It's very rare for a G7 to focus on financial regulation," one of the officials said, speaking on condition of anonymity.There is also a general displeasure about the currency games being played by London, New York/Washington and Tokyo, and their playing fast and loose with global commodity prices that are disrupting other nations' economies.
There is apparently some behind the scenes 'horse trading' going on at the G20 currency conference. And there is a push back by the Anglo Americans to defer any action or announcement until later this year, other than the usual bilateral and multilateral currency agreements.
I hear that this may culminate in September. But words are cheap, and rumours are plentiful, so let's see what happens.
