Shorting the yen and Japanese Government Bonds (JGBs), over the past 2 decades, has been such a disastrous trade for so many long term investors/traders that it is called by industry veterans as the "widow-maker" trade, and it is still making victims today. This article will explain why so many smart people were "killed" by this trade, why it didn't work then, and why it may finally make sense to short the yen in the not so distant future.______________________________________________________ ► Historical background: the good times and then the bubble...In the mid-1950's, agriculture still accounted for about 40% of the workforce, and the economy was characterized by low wages and uncompetitive industries, but the next three decades would bring such an unprecedented economic growth that by 1980 nominal GDP was estimated at US$1.065 trillion, compared to only US$44 billion a mere 20 years before. After WWII Japanese citizens were encouraged to save more of their income. With so much money in the banks, the country running bigger and bigger trade surpluses, and falling interest rates, credit was easily available. This led to a bubble of biblical proportions in the real estate and sto…
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