Commander in Pips: Since you earn fewer wages on your job (sum is the same but dollar value is much lower), you’re at the same time paying less also (goods price are the same). This is like if you know that you are deceived by somebody, but you agree to be deceived – then there are no problems around. Deceiving side is US government while deceived side is the rest of the World and mostly Japan and China and other big holders of US debt. Even more, if you recalculate US GDP in terms of Gold – you will not see any positive growth right from 2000s. If you will recalculate Oil prices in gold – you will not see any doom and gloom of huge upward trend and cracking plunge. Think about it…. Ok, let’s take a look at other markets. May be the story a bit different there… On chart #3 we see that JPY and Nikkei-225 are much more closely related. During 2002-2007, the stock market was in a bullish trend. Although the JPY has shown some significant retracement in 2005 – the overall dynamic in 2002-2007 was positive. In 2008 we clearly see the same risk aversion and now, since the crisis still holds, the JPY continues to strengthen. The stock market has shown some pullback from the bottom, but we hardly can call it as a new bull trend. Chart #3 | Nikkei-225 and JPY/USD Monthly Chart #4 | EURO STOXX 50 and EUR/USD Monthly At the first look, in the EU there is very poor relation, but taking a closer look it seems not bad. Growth in 2002-2008 was in currency as well as in equity market. The stock market has turned south a bit in advance of EUR. Direction of current fluctuations coincides with each other. So, the intermediate conclusion is that “safe-haven” currencies show significant deviation from the theory of one direction move of equity market and currency. Example of EUR shows that it can hold in other currencies. And what about emerging markets?