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A MAJOR Prediction from a Legend in Currencies

By Dr. Steve Sjuggerud
Monday, February 4, 2013

Dennis Gartman issued a MAJOR prediction at the MoneyShow last week...
 
Gartman probably needs no introduction... You might have seen him on CNBC. The network relies on him as an expert in trading in both the currency and commodity markets.
 
But you might not know that Gartman has been at this for four decades... that he's taught classes to the Federal Reserve... and that his daily Gartman Letter has been required reading every morning on most major trading desks for a quarter-century.
 
In short, in the world of currency and commodity experts, Gartman ranks near the top. So I was a bit shocked at the bold prediction he made in Orlando...
 
Gartman told the MoneyShow audience, "The Japanese yen is going to ONE FIFTY.
 
"Wow," I thought. "Did he just say 115... or 150?" 
 
Compared to stocks – big currencies typically move at a sloth-like pace. The Japanese yen is at 92 to the dollar now. A move to 115 is still big. A move to 150 – which would be a nearly 40% drop in value against the dollar – is enormous.
 
So was Gartman really predicting the yen would weaken from today's level of 92 all the way to 150? Actually, yes...
 
He said: "I remember when the yen was around 250 in the mid-1980s," implying that a move to 150 wasn't as big as you might think.
 
"Since [Japanese leader Shinzo] Abe took over, the yen has moved six points," Gartman explained. "All this bluster from Abe, and we've only gotten six points so far," he continued. "There's much more to come!
 
Gartman explained how governments typically can't do most things well... but printing money is one thing they are usually pretty good at.
 
"Abe is ALL IN," he said. "The administration in Japan has made it very clear... It will force the Bank of Japan to print 'unlimited sums' of money.
 
He also explained how there's not much else that Japan can do to grow its economy, except to try to grow its exports. And the surest path to more exports is a dramatically weaker Japanese yen.
 
"You want to be short of yen," Gartman concluded. That's an understatement. If Gartman is right, you can make some serious gains betting against the yen.
 
The easiest way to follow Gartman's advice through the stock market and make some real money betting against the yen is to buy shares of the ProShares UltraShort Yen Fund (NYSE: YCS).
 
YCS attempts to return twice the inverse of the daily move in the Japanese yen. In plain English, that means if the yen weakens by 1% in a day, this fund should be up 2% that day.  
 
Of course, the opposite is true. And there are no guarantees it will fulfill its mission. But over the past two years, it's done a pretty good job. The yen is down about 12%. YCS is up about 22%.
 
If Gartman is right – and he has been at this currency game a very long time – there could be much bigger gains to come.  
 
Good investing, 
 
Steve




Further Reading:

Like Fed Chairman Ben Bernanke, Japan's leaders are committed to printing more and more money. And while the "Global Bernanke Asset Bubble" will hurt currencies around the world, it's also creating some fantastic buying opportunities. See which assets Steve's recommending here and here.

Market Notes


NEW HIGHS OF NOTE LAST WEEK
 
American International Group (AIG)... insurance 
Berkshire Hathaway (BRK-A)... insurance 
Travelers (TRV)... insurance 
Oracle (ORCL)... software 
eBay (EBAY)... Internet auctions 
Google (GOOG)... Internet search 
Cisco (CSCO)... Internet "plumbing" 
Ericsson (ERIC)... mobile Internet 
Medtronic (MDT)... medical devices 
Pfizer (PFE)... Big Pharma 
Johnson & Johnson (JNJ)... Big Pharma 
Bristol-Myers Squibb (BMY)... Big Pharma 
Gilead Sciences (GILD)... Big Biotech 
PepsiCo (PEP)... Big Soda 
Hershey (HSY)... Big Chocolate 
ConocoPhillips (COP)... Big Oil 
Schlumberger (SLB)... oil services 
Blackstone (BX)... a housing bet 
Home Depot (HD)... home improvement 
Colgate-Palmolive (CL)... household goods 
Procter & Gamble (PG)... household goods 
Simon Property Group (SPG)... shopping malls 
Automatic Data Processing (ADP)... money shuffling 
JPMorgan Chase (JPM)... money shuffling 
Goldman Sachs (GS)... money shuffling 
MasterCard (MA)... money shuffling 
Honeywell (HON)... manufacturing 
3M (MMM)... manufacturing 
Calpine (CPN)... natural gas power plants 
Cheniere Energy (LNG)... natural gas infrastructure 
Enterprise Products Partners (EPD)... natural gas infrastructure 
Chicago Bridge & Iron (CBI)... natural gas infrastructure 
The Nikkei... Japanese stocks

NEW LOWS OF NOTE LAST WEEK
 
AngloGold Ashanti (AU)... gold miner 
Barrick Gold (ABX)... gold miner 
Iamgold (IAG)... gold miner 
Newmont Mining (NEM)... gold miner 
The Yen... Japanese currency

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