Liquidity and the carry trade

Discussion in 'Economics' started by thriftybob, Jun 6, 2007.

  1. When the yen was getting strong in Feb., that's when the market got creamed. The yen is up against the dollar more than any other currency today.

    To pay back these huge borrowings, things must be sold, and the more that is sold and paid back, the stronger the yen would get, forcing more of the same.

    Reduce liquidity like this and stocks will fall.
  2. You mean the huge 0.3% rally of the JPY against USD?