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Japan Ministry Of Finance Announces May Consider Unilateral JPY Selling Interventions If Speculators Drive Up Currency
If? And, of course, the reason given for the upcoming intervention, is the good old "speculative" wolfpack. The kneejerk reaction in the Yen is lower, but quite muted. The market seems to be expecting much more from the BOJ than mere ongoing rhetoric. Having seen the disastrous example of the failed SNB intervention, the central bank-vs-everyone else game will be far more interesting this time.
More as we get it.
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panic time bitchez...
Sayonara Kono ama!
Look at the Euro chart - Beware of the Dragon!
I suspect the old men on the BoJ Board are getting frustrated that Miyako Suda has been for the most part proven correct.
The impotence of the BoJ Board is going to become quite apparent in the coming months.
I can't find some of Suda's better speeches/presentations... here is one where she is playing to the BIS crowd...
http://www.bis.org/review/r100816f.pdf
Wolfpac for life....AOoooooo..!
Oh no, There goes Tokyo. Go go Godzilla
Little Tokyo Neighborhood Terrorized By 4-Foot Godzilla
http://twitter.com/SurplusSatire/status/21978115520
:) :) :)
Hadouken!
The ageing generation are retrieving their money invested overseas to spend back in Japan was one reason I read about...
MOUNT FUJI
http://williambanzai7.blogspot.com/2010/08/mount-fuji.html
Sssssshhhhhhhh ...
Uncle Ben & Tiny Tim still thing QE2.0 is going to save us.
I guess 15 years of this crap o la still has not convinced the ivy league pompus fucks that we are screwed.
I amasking this question in all seriousness and I hope I will get some intelligent responses. I thought that the reason the snb euro intervention failed was because the Swiss franc was a fundamentally strong currency and the euro was a basket case. I also thought that the yen is considered by everyone as grossly overvalued, but is the recipient of risk off flows. It is strong not because of fundamentals, but because it has always been a safe haven. It would seem to me that they would have more luck intervening than the SNB did. Am I wrong in my analysis?
Currency intervention always fails.
It is the equivalent of fiddling with ripples in advance of a tidal wave (mostly insignificant, although it is sometimes possible to trigger a statistical deviation in the very short term).
The volatility in the markets you see is merely because of political thrashing -- nobody understands which penguin will be shoved off the cliff first into the sea lion's mouth. It's possible it is based on fundamentals, but in today's environment, not likely (it's highly random). Thus, this is not about monetary policy, nor even about fiscal policy. It's about political will (and specifically which government official in which nation calls "bullsh*t" first).
All these currencies are toast -- either because of the fundamentals (they cannot service their debt), or through counter-party risk (all central bankers locked arms in their Ring-Around-The-Rosie children's game).
That means everything you see is mere central planner noise. No deep thinking required.
China's currency intervention is runnin on 30 years now, been doin fine
I concede Japan's deflation and currency intervention over decades. Perhaps it is a problem relating to a definition of terms.
Japan has been losing wealth for, "runnin on 30 years". That is independent of their printing.
It's an interesting, and somewhat happy accident, that Japan has been willing to give away their savings and wealth for all that time. While Japan's savers gifted their wealth to the rest of the world (losing their savings, and permanently deferring consumption), the rest of the world happened to be "levering up" during that time, providing a market for Japan's printing.
That doesn't exist today, and won't happen again (nobody can continue to lever up to provide a market for Japan's printing).
All of Japan's printing was merely sovereign-default-in-the-slow. Nothing changed, except to make a bad problem worse (banking sector default decades ago has now grown to full-fledged sovereign default). Currency intervention didn't "work" (e.g., they didn't get "something-for-nothing"), but rather, it merely delayed and aggravated what was already true (banking default is now sovereign default).
True, world capital flows and growing leverage outside Japan permitted Japan to perform this slow default. However, that's all it was: Default.
If the assertion was that they performed "currency intervention" and "came out ahead", we disagree. If the assertion was that "currency debasement" took a long time to force sovereign default, then yes, they pulled off a very slow default. (Other nations shouldn't get excited, though: Other nations can't have this "slow-default" these days because there is no market for it.)
My assertion is that: If you find yourself in trouble, currency intervention won't fix it. In fact, currency intervention won't change *anything*. Yes, I concede currency intervention can *sometimes* time-shift an event.
The corollary is the private individual that cannot service debt: He can create a default event (e.g., bankruptcy), or continue to borrow money to pretend to service liabilities (attempting to postpone the event, but he's already bankrupt *now*, so we're only talking about leveraging up to postpone the event). Japan was lucky enough to find suckers that would still lend it money over the last few decades. It will now recognize what it should have recognized decades ago (although, yes, it did manage to postpone accounting, arguably at the expense of forcing extended suffering onto its citizens, and making the problem worse for itself).
And JP Morgan (via Zero Hedge) just laughs in the face of SNB intervention:
* We would need to check my records a little more careful but we suspect the SNB has set a new world record with its FX intervention in May. Data released by the Swiss Statistics Office and confirmed to us by the SNB puts intervention at CHF 78.8bn in May (yes, that is the change of reserves, not their level). To put this into perspective, this is nearly three times the previous largest monthly intervention and amounts to 15% of GDP in just one month. Current reserves are now CHF 232bn or 43% of GDP.
* We knew the SNB intervened in heroic quantities to defend the 1.40 level but this figure is way beyond even the most extreme estimates. It is in fact just plain silly, and confirms an FX policy that: 1) has run out of control; and 2) is even more unsustainable than thought. And even should the SNB be reckless enough to want to repeat intervention on this scale, we can be pretty certain that it will only do so on a liquidity-sterilised basis. There is simply no way the SNB is going to conduct unsterilised intervention on this magnitude and very quickly lose complete control of domestic money supply. The fact that EUR/CHF has declined by 10% even though the SNB has sold nearly CHF 190bn, or 35% of GDP, since the spring of last year, is a clear a demonstration that sterilised intervention, for this is what the SNB has done, simply does not work. It is a con-trick, one which the market is learning to look through . . .
And don't forget: most of teh other currencies, including the dolleur, are considered crap compared to the yen.
Stop pointing that gun at Mrs. Watanabe!
You ever get the feeling that these central bankers are about to lose all control. Mr Market always wins.
Central banks never had control, that is the assumption that is being proven wrong just like the last time, and if you create a system using usury as your basis, next time will look basically the same.
The only way a central bank could be in control is if they have unlimited power, absent unlimited power they are about as powerful as the Wizard of Oz hiding behind the curtain.
The job of the central bank and Benny is to keep all you lemming marching along the road to doom till your dying breath. The longer the road travelled until you die from fatique, the more successful they were. This has been the most successful system to date, in the end it will mean the most number of liquidated non-performing lemmings(liabilities) to date.
It has always been known the lemmings would die from fatique, the only questions were when and where along the road they collapsed. Watch Benny now, they will try and beat the fatique lemming sitting on the side of the road once again to keep him walking down the road to doom. Eventually Benny will be beating a dead lemming in the hopes of getting him walking... entertainment at it's finest.
Mako, maybe fatique was a Freudian slip, I read it as "fattyque" and the picture is rather funny.
Fat Lemming's into the mouth of the (sea) lion.
Nice to meet a fellow "clear-eyed" view of life-er.
ORI
http://aadivaahan.wordpress.com
Fatique or even over eating until vomitting and implosion happens. :)
I actually like the video below as an example of their futile attempt.
http://www.youtube.com/watch?v=y_24rmOoCjU
Beat a dead horse or lemming is good to.
http://www.cenekreport.com/storage/beating_a_dead_horse.jpg?__SQUARESPAC...
All attempts will eventually fail, the equation always wins the war.
Despite Government Regulation and Censorship, Disfranchised Chinese Find Ways to Make their Voices Heard.
And today's market was brought to you by el gato.
http://yfrog.com/nbcatmarketj
Currency wars end in either real wars or the death of globalism. I'll bet on the former.
Speculator - Anyone who happens to be positioned against our whim of the moment in any given market.
Private Investor - A dying breed of idiot.
Need to print more yen.
But everyone in debt (everyone) now needs a cheaper currency. Those NOT in debt need a cheaper currency to keep their export ponzis going.
So, everyone should peg to the dollar and import OUR inflation.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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