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Japan Decision To Allow BOJ To Monetize ETFs, REITs And BBB-Rated Bonds Sends Yen Higher, Gold Spikes
Earlier, the Japanese government approved the BOJ decision to monetize, in addition to the traditional JGB securities, also ETFs, REITs, and BBB and higher-rated bonds. In other words, the BOJ is now permitted to do what the Fed will have authority to do with a few months: buy virtually all risk assets, as buying ETFs is the same as buying the general market courtesy of the most traded security in the world, SPY, to push and pull the entire market in whatever direction it goes. There are two questions at this point: is the BOJ allowed to buy foreign (read US) assets that fall under the above buckets, and whether the FX currency swap line recently established with the BOJ will allow the Fed to use Japanese proxies to monetize various US assets. Or will the Fed first seek input from the BOJ on how to proceed with sending the Dow to 36k.
The chart below shows the immediate reaction in USDJPY to the news. The funny thing is that with this decision, Japan is once again dead last in the currency debasement race.
And yes, gold has finally awakend
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a year ago, no one could have possibly made up the shit we've seen these central banking fucks come up with.
Up until now politicians have tried to keep a lid on reality. Next few years Pandora's box will erupt. Stay tuned.
Crap meet fan. Fan meet crap. Enjoy your marriage.
It's like a Monopoly game that never ends. The fat fuckers own all the good property, we're mortgaged to the hilt, and just landed in jail.
"the BOJ is now permitted to do what the Fed will have authority to do with a few months:"
Is this hyperbole?
The rape of the general population by bankers continues unabated, in every nation on Earth.
Bottoms up, Japanese serfs!
A couple years ago the inflationists were telling us that the Fed would end up buying just about everything once this all blew up. The deflationists assured us that that would never happen.
Turns out that history does repeat.
Looking at the DXY,, It is 77 and change. The low was 74. The fed believes they still have room to play. What happens if the Dollar falls below 60?
I'm thinking much past 72 will start the real "fun."
We've got less than a week to find out if these psychos at the Fed are telling the truth about their intentions.
Gold soared? You call a less than 1% increase soaring? Gold has been traded below 1350 for more than a week. I have no idea how long the consolidation will last.
I see a gold "spikes" and not a gold "soared"
SPIKE on the 1m chart. uh huh. push the book, guys, push the book.
This type of desperation illustrates the lack of strength in their economy and by default others since Japan is an exporting powerhouse. For all those that claim the internals of the economy are improving and market valuations are fair how do you respond to the BOJ action?
US, issue more currency to buy risk assets (indirectly) and the dollar drops
Japan, issue more currency to buy risk assets directly and the yen rises
Other factors at play?
The Yen didn't rise though - the dollar fell.
Yen is down vs. other currencies, e.g. EUR and GBP. The dollar is down more (presumably due to the new flip-flop in QE indications - today's move being higher) than the Yen.
That being said - the Yen is up against some other currencies though - e.g. CHF, CAD, AUD. They're less significant though than EUR and GBP.
This will not end well.........the total system is now screwed and makes no sense. The favoritism been shown to the few smacks of the same traits as all socialistic systems now and in the past. There is no way on earth to justify current policy actions expect to believe there is an intentional will to destroy the system, the country and the people.
I think it's more easily explained by game theory and a broken economic framework.
Do you think I can sell my house to the Fed? How about my clunker?
Behind the action is a conviction that Japan's AAA bond rating is no better than a BBB corporate bond. If you were a Japanese politician, you would approve it too.
"this the end my only friend the end...."
The only thing the central banks have done and can do... is slightly delay the inevitable.
"the BOJ is now permitted to do what the Fed will have authority to do with a few months"
The Fed already has this authority. But more to the point, even if it didnt, it wouldnt matter...because it's never mattered before. In the original 1913 Act, the Fed was expressly prohibited from buying and holding US Treasury securities. The original framers of the Act had to reassure doubters that the Fed would not be used as a monetization instrument. Less than a decade after passage, the Fed was buying all sorts of UST paper (just helping the War financing effort of course). It would not be until the Banking Acts of the 1930s (cant remember if it was the 34 or 35 Act) that this clear violation of law was ex post facto "remedied."
At some point dosn't the paper markets fall the faster the fed prints because everyone is panicking rightfully so into pm's ? I keep having this spinning tire digging itself deeper and deeper into a rut going nowhere visual.
In other words, the BOJ is now permitted to do what the Fed will have authority to do with a few months: buy virtually all risk assets, as buying ETFs is the same as buying the general market courtesy of the most traded security in the world, SPY, to push and pull the entire market in whatever direction it goes. There are two questions at this point: is the BOJ allowed to buy foreign (read US) assets that fall under the above buckets, and whether the FX currency swap line recently established with the BOJ will allow the Fed to use Japanese proxies to monetize various US assets.
duh.
Every conduit available will be used to "stabilize" the global economy .... The "rules" including that nuisance called the rule of law matters not when national security interests (read Wall Street bonus/securities pools), and their continued coke & hooker requirements are at stake.
http://www.youtube.com/watch?v=e6L8NegkIkE
I suspect the G7 central bankers will one-by-one come out with similar "rulings"....as if the criminal fuckers haven't been doing this for years. There is no hope for mankind so long as these devils are allowed to exercise this power.
The Asians - and the Europeans to a large extent are quite comfortable with all this. I mean they dont pretend that the central bank is an independent entity - not at all. Why? They have risen through a partnership betwen big business/banks - and govt. That is normal for them.
Thats why they have been so incredibly innovative and have changed the world. I mean OK the US owned the 20th century - by inventing electricity, cars, planes, TV, packaged food, computers and shit like that. But now we are in the Asian century and stand in awe - just look at the folowing world changing technologies invented and commercialized by the Chinese:
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chinese invention = japanese cowboy
* Just In Time "Planned Obsolescence"
* Perfected manufacturing/population control process
* improved banker recidivism rates...
In 2006, two China Construction Bank employees—branch manager Zhou Limin and accountant Liu Yibing—were put to death with a lethal injection for stealing almost $52 million from bank customers., who had been promised high interest rates on what turned out to be bogus accounts. Around the same time Oil executive Lin Ringxing was sentenced to death for embezzling $4 million at another China Construction Bank branch and taking $620,000 in bribes.
Executing and dishing out harsh penalties so many people for corruption resulted in more than 4,000 corrupt officials fleeing the country according to a report in 2004.
I am glad the japanese are all going to be milionares too.
Seppuku
Central Bankers wo seppukushite!
The race to debase is now in full swing. Funny thing is, it's much easier to slip and fall while charging downhill than it is while trudging uphill.
I see a snowball effect, downhill dominoes. The rupee is in such a precarious place. The entire middle class bloat has been export (Info Tech) related. The entire consumption madness has been import (Cheap Chinese shit mostly) related.
Such a strange balancing act and meaningless. Strong rupee, cheap chinese crap gets cheaper. Strong rupee, Outsourcing companies scream uncle, cannot meet wage pressure.
Talk about a rock and a hard place.
And incidentally, Japan's seeming ability to pull off the grind they have been in should come as no surprise. Their entire production is robotic and depreciated off the books.. And their power is virtually free. And a strongish yen gives them the power to keep the raw material complex (esp. AUD/JPY) happy.
All is not always as it seems, public handwringing aside.
ORI
http://aadivaahan.wordpress.com
This is also shocking in addition to the Fed leting the world know that they don't know what they are doing and have to ask the PD's what to do.
where is orly? we need to chat.
GE
"We pitch the shit to Ben!"
I am not an trained economist and yet the professionals seem to be
making up thier own rules. How can you buy your own debt without everything going tits up? Can anyone put any logical spin on this at all?
This is getting really worrying. Anybody on fixed income is going to be screwed. The soup lines just got longer.
Is this really going to scare the masses into spending as suddenly as the weimer experiment?
I recently wrote this:
Did the Fed Simply Pass the Printing Baton to the Bank of Japan?
Some more history:
Here's what a BoJ Policy Board member said on Dec 11, 2001:
Of course, that would change. Here's what the BoJ said in their Jan 21/22, 2003 meeting:
Not ready yet, I guess. Here's what BoJ said on Oct 5, 2010:
Attachment 2 says:
You might then think the BoJ has a mandate to purchase not SPY, but SDS; however, that would depress US yields--not their mandate. The carry trade is sell Yen (depresses yields), buy stocks. BoJ could easily rationalize purchases of SPY to reignite the carry trade.
From Ed Steer's daily email:
I was hoping for a drop in gold so I can buy more. I am stuck with silver as the affordable PM
And someday soon, More, you will thank your lucky stars that Silver is all you could afford.
ORI
http://aadivaahan.wordpress.com
The race to debase in the so-called 'currency wars' is cleary an coordinated and engineered event. The corrupt and colluding private Central Bankers of the world have been wanting to move from national currencies to regional currencies (i.e. Euro, the Amero, etc.) to a full-blown World Currency for years. The only way to achieve it is to destroy ALL of the national currencies at once, create another global financial 'event' (probably by 2018 at the latest), and have the 'solution' which will be a global fiat currency (not gold or silver unfortunately). Say goodbye to what is left of our sovereignty if the banking elite pull this off this time.
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