
Originally Posted by
Melonie
“If this continues, it will become tougher for the U.S. to attract the foreign investment on which it's so dependant. Then there's the potential unwinding of the yen carry trade, where investors borrow cheap money in Japan and invest it in higher-yielding markets like the U.S. In February the Bank of Japan ended its policy of pumping excess funds into the economy and Japanese and last week the 10-year Japanese bond rose to 1.975%, the highest rate in just over five years.
“Wayne Nordberg, a senior director at Ingalls & Snyder, an investment-management firm, expects the dollar to decline 10%, which will be enough to make U.S. assets unattractive versus those in the rest of the world. ‘Sometime this year, in September or October, you'll see the S&P down 20%,’ he warns.
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