DENVER – The “Spanish Inquistion” routine — funny skit with a long life. Our routine is a yen-franc inquisition.

One skit. Gold plays a role in this global money flow. Can you pronounce Hishikari?

Strategy: using the Japanese yen/Swiss franc ratio to confirm that gold in dollar terms is poised for the leading role of its elemental lifetime.

If my adviser on this is correct in timing, you can be long gold and do 99.9 fine. This year. He has yet to lead me wrong in the 12 or so years we have exchanged ideas.

Thrust Of This Article

It’s the yen and gains that the Japan currency marks against the Swiss franc that will confirm fresh money flows into gold.

Truth: the yen has been losing ground against the Swiss franc for three years. Chart lines show the franc’s run is nearly out of steam.

“It’s taken years to convince the world that Japan is a basket case, in some ways a terminal society with Fukushima being just one headliner for that,” says our TCR adviser on this.

“The yen is a cheap currency that has most of the popular money running the other way.”

That’s Anthony Giallourakis, an active investor and former Florida stock broker. Mr. Giallourakis is a recent gold investor. Not a gold bug. He says he’s much rather be backing entertainment software publishers or music technologists. We have been sharing themes since the early 2000s.

The case here is graphic – see charts. Also, any of the services, Bloomberg, MarketWatch and so on, will let you customize these charts for free.

Understanding this trade  

Japan is a nation with plenty of liquidity. (Lots of currency printing, for sure.) Its economy might be described as a least of evils for 2015 and 2016. That is, Japan projections of 1 percent yearly growth, or slightly less, are probably in a realistic realm.

Maybe more realistic than projected growth in North America, Europe and China.

Mr. Giallourakis contends “the control money (the .01%)”  will move their trillions into the best bucket: one currency, or a swap trade, or a long-short, or a commodity.

“I am talking about the very big buckets, not the small ones,” he says.

As investors, we know trends run and run. You do not need to be a wave technician to understand it takes about three years to be conditioned — as a human — to forget or be convinced of almost anything.

We attach 3-year charts of the JPY/CHF (yen vs. franc) and XAU/USA (large gold shares vs. USD).

It looks like yen are about to break out, right?

The contention, simple enough, is the price of gold in U.S. dollars will follow if yen finally do notch further gains.

“These two, yen and gold, are both buckets that have been given up on. We have been conditioned to believe Japan is a real basket case and the Swiss franc rules all. We also are conditioned to believe that gold is a total basket case … and should be avoided, especially in dollar terms.”

Mr. Giallourakis shares our TCR belief that select gold equities — ideally those producing or just about to produce gold — will log the largest and most rapid gains in the “explosive bull market just ahead of us.” We recently dropped in on a Colorado gold mine that is producing high-grade ore for its refinery customers.

Takeaway: yen is path to gold; it’s not intuitive.

Above in those two charts: if chart #1 breaks out, chart #2 will follow with a vertical move like we have never seen before.

JOY-CHF Forensics 

– Having made a bundle, presumably, by betting against the euro, the in-the-know .01% will buy yen. Once these fat-cats have moved enough capital, the yen (JPY)/franc (CHF) trade will favor yen vs. francs.

– Once that turn has occurred, those cats will start to sell their francs and then, buy their gold with that money.– “It’s a lot easier to sneak into gold without everyone else knowing what they are doing,” our adviser (who is no longer a registered broker) says.

Now the big money is long the yen and long gold. The euro will continue to drop, especially in yen and gold terms. The franc will come under pressure from more selling. This is, I dare say, exciting. I cannot wait for the feature film.

Gold will rise vs. the franc, thus confirming the move in gold to everyone, including the financial media.The U.S. economy then shall slow, perhaps undercutting forecasts.

Result: Now you have a long gold position, you’re long yen as your liquid position … and all the major currencies are falling against gold. “That’s what the big insiders will need to have happen to really clean up.”

Thanks for that, Anthony. That Hishikari mine is extremely high-grade epithermal with plenty of veins yet to be discovered, looks like. Like the one we just saw in Colorado?

Keep reading about this fresh yen money flow and the search for producing gold mines that are profitable — at The Calandra Report‘s thomcalandra.com.