Crazed Kamikaze Counterfeiters

Tim Knight from Slope of Hope's picture
From Slope of Hope: Well, my fellow Slope-a-Dopes, your selfless Idiotic Savant servant, whom is securely chained to his desk, has spent a significant part of the long weekend, perusing nearly every finance blog on the world wide web for you.  Therefore, I can reliably report to the SOH, that the overwhelming consensus out there in the financial blogosphere, which has now reached a nearly universal feverish pitch, is boldly & proudly heralding that a most encouraging new economic dawn is finally upon us.  It seems, a pristine permanent plateau of prosperity has been patently perfected.

According to many, we are leaving behind the hostile, unruly, nearly catastrophic financial crisis which began in early 2008, and replacing it with a new era of sublime, totally tamed, and completely captured capital markets.  All this, courtesy of our brilliant public authorities, who so astutely and capably swooped in to save the day for us all.

303_1swear_in_wideJust in case, you are still one of the few sage equity exchange participants, that remains unconvinced by the great

USA! USA! USA! capital markets comeback pompoms, we have arranged a special effects holiday treat to bring you on-board the super flagship of State. We sure hope you enjoy the show. The relentless media driven smoke & mirrors, incessantly producing red white and blue Wonder Bread & hypnotic Carnival Cruise circuses, are in full force this weekend. Capped off by the fanatical Obonga inauguration palapalooza, which has everybody in America enthusiastically and stupefyingly, utterly stoned silly. I curiously ponder what the venerable, eloquent, deep thinking MLK would really feel about all this spectacularly superficial, overly hyped, completely bogus, self satisfied apple pie splendor.  But, I digress.  Sorry, I just couldn't help myself.  Back to the party line......
Sunshine_sunflower-Summer_romance_Feelings_1680x1050The warm glow of the sun is upon us again, and will soon shine as brightly as before, SPX 1700 here we come.  The main thrust of this new found optimism stems from the notion that the parched & wilting private consumption Crocuses of old, have effectively been replaced by a special strain of fast growing Government spending Sunflower shoots.  Our green thumbed Treasury & Central Bank planters, assure us that the fertile financial hybrid flowers will splendifferously bloom once again, with a magic turbo boost delivered by the new Miracle-Grow monetary & fiscal fertilizer. Most flower pot pundits are singing the same happy horticulture harmony.
The melodic musical notes sound something like this:
  • The original culprit, the devastated & destructive housing sector has now bottomed out, and there should be further constructive smooth nailing ahead.  
  • The all important U.S. equity markets have soared back towards the heavens, like an unGodly shiny new Sphinx, up over 120% from the harrowing SPX 666 Lucifer hell hole, since the money mayhem of March 2009.
  • The sick expiring latin PIIGS, instead of ending up on Iggy's breakfast plate, are being fattened up at the ECB trough with copious free flowing OMT hog feed.
  • The chief EU emergency room cardiologists, have miraculously breathed life back into the flat-lining EKG of the EURO heart attack patient, using the latest LTRO defibrillation techniques.
  • The global Inflation lion has been skillfully slayed, and the neatly folded Origami paper tiger is about to ferociously roar once again in China.  
  • The Bond bubble will gently deflate its overly pressurized pent up air, right into an eagerly awaiting, warm and welcoming, stock market hot air balloon. 
  • Even the dismal job market is being jack hammered back into satisfactory street shape.

Well, you get the's all coming up roses!                                                                                                                                                                                           

Are we really to believe that persistent and massive government spending, from the fiscally bankrupt Nation States of the developed world, combined with their Central Banks' perpetual programs of counterfeit money printing, can actually make for a sound and sustainable new global economic paradigm in the 21st century?  You can't be serious, can you?  Can we really print & spend our way to prosperity?  Yes we can!!!!  Break out the Obonga bong & Pakalolo, we have found the holy grail.                                                                                                                                            
You mean to tell me that the popular Dire Straits lyrics; "money for nothing and your chicks for free", is to be the new economic business model for the United States of America.  Can this frantically fabricated financial fairy tale actually materialize?  Are we really ready to sound the all clear?  Nothing but cloudless azure skies ahead, they tell us.  Our economic leaders would have us genuinely believe in this delightfully dazed panorama, which conjures up much the same feeling one gets, right after a torrentially drenching, early afternoon tropical thunderstorm, abruptly lifts & clears, as the sunny bright blue sky stunningly unveils itself once again, for all to enjoy.   Can this really be?                                                                                                                               
Something is clearly amiss in this deluded depiction of bliss.......                              
Private+Planes_wallpapers_240Your most skeptical Idiot Savant is definitely not buying into this "sunshine day dream", to quote another musical lyric, this one from the all American band The Grateful Dead.  I really wonder, if that very same, warm and comfortable, sun filled feeling, gloriously graced the quiet islands of Hawaii on the Pacific morning of December 7, 1941?  I trust you can see where I'm going with this Kimosabe-son?  We are in dire straits alright.  Tora! Tora! Tora!
As you can see from the captivating header post art work displayed above, Japan is where this artiste is applying his brush strokes today.  To me, the land of the rising sun is the most intriguing landscape to paint at the moment. The newly elected prime minister, or should I say prime printer, crazed Kamikaze pilot Shinzo Abe, may well be the man that strikes the match which lights the stack.  He was put into office on a platform that was primarily based upon forcing the Bank of Japan to ramp up its stimulus efforts, indeed to run what amounts to unlimited easing until inflation hits 2%.  Make no mistake, this stimulating samurai most certainly means business, as the Yen is down a head spinning 12%, since he drew his razor sharp, double edged sword.
So, let me get this straight.  This honorable, devoted, suicidal dive bomber, is somehow convinced he can print the Yen into oblivion, all the while, maintaining the lowest yielding major bond market on the planet???   How, in this glowing Blowfish Japanese sea world of his, does manufactured inflation not bring on higher interest rates?  Just one look at the diagram below, should scare the living sushi out of you!  Hara-Kiri anybody?  Once Japan falls, all the California rolls follow.  
Japan now has a breathtaking 230% ratio of government debt to GDP (the last estimate I have seen), and it is growing at 10% plus a year.  The government will borrow nearly 45% of its budget this year.  Has there ever been a more clear disaster on the horizon?  Holy Tsunami!  Once interest rates get away from the BOJ, even in the slightest, BOOM goes the Bonsai!                                                                                
John Mauldin knows the score, he coined the phrase; Japan is a bug in search of a windshield:   

"The new Japanese government, led by Prime Minister Abe and former Prime Minister and now Minister of Finance Aso, have very explicitly demanded that the Bank of Japan target 2% inflation. They have made clear their intention to replace the governors of the current BoJ board with members who agree with this policy. They have the political clout to do so. Whether at the upcoming meeting or after April, when a new head of the BoJ is appointed, that is going to happen. These moves mean there will be a massive printing of yen. In response, the yen has already weakened by over 10%.


You can control the quantity of money or the price of money but not both. (Yes, I know that one influences the other, but I am referring here to large-scale printing of money.) One has to assume that the law of gravity will not be repealed and that investors will want something more than 2% on the ten-year bond if inflation is at 2%. If the ten-year bond were to rise by 2%, Japan would soon be spending over 50% of its tax revenues on the interest carry alone. I submit that this is not a workable business model.

Why now and not sometime during the past ten years? I see a number of factors coming together this year:


1. The Japanese had a 15%+ savings rate in 1990. That is now down below 1%. (Exact numbers are difficult, because Japanese data on this topic has severe lags, and thus my number is an extrapolation but a reasonable one, I think.) Due to the nature of their retirement system, they have channeled the vast bulk of these savings into JGBs. When the savings rate goes negative or is no longer sufficient to buy all the issued debt, the choice will be to monetize the debt or cut spending. The latter choice does not appear to be part of their national conversation. Cutting spending by the amount required will mean a serious recession and further deflation, an option the new government explicitly rejects.


2.  Both the trade deficit and the current account have recently turned negative. The vaunted Japanese export machine seems to have hit a wall, and this will limit options in controlling the price of the yen, even if the government wants to. Understand,  inflation targeting is also currency-valuation targeting. They clearly want the yen to devalue. I have been writing for years that the yen would eventually be 125, then 150, then 200 to the dollar. It has been 300 in my lifetime, and unless the Japanese change direction, there is no reason it can’t get there again. This means that Mrs. Watanabe will see her energy bills double. This will call into question the Japanese decision to close their nuclear energy plants – something that Abe is already reconsidering.


Think the Koreans will be happy when you can buy a Lexus cheaper than you can buy a Kia? (Disclosure: I love my Japanese Infiniti, the first “foreign” car I have bought, except for a two-month dalliance with a disaster of a Volkswagen 30 years ago.) Think Samsung and LG will be happy when Panasonic and Sony can eat their lunch pricewise? Welcome to the era of real currency wars."


This note is worth about $11 today. In the future?  Not so much.



All four major central banks of the developed world (FED/ECB/BOE/BOJ), are now entrenched in full tilt printing mode, with no end in sight.  Can you say currency wars?  The zero sum global warfare has begun, and beggar thy neighbor is the battle cry of choice.  No growth?  Pas de problème says La Banque Centrale Européenne, we can export our way out. Massive external debt?  No problem say the Federal Reserve & Bank of Japan, we can devalue our way out.  What's wrong with this picture?  If we all devalue together, as an ensemble, aren't we simply spitting in the wind, whistling dixie.  Got Gold?
First come the currency wars, then come the resource wars. Take a quick look at oil & other basic commodities today, smell the inflationary warheads my friends.  Military conflicts in Iraq, Afghanistan, Libya, Syria, Mali, etc.....Iran?  Do you really think the non western nations of China, Russia, India, Brazil,.....etc, are simply gonna stand down, as the developed, so called "civilized" world, blatantly abuses it's global reserve currency status, while simultaneously plundering the globe's natural resources?  Can you say WWIII?  The intensifying China vs. Japan sabre rattling is just the beginning mes amis. Rest assured, along with the ensuing destruction, will come an inevitable economic depression of epic duration.  That is the true score boys & girls, and don't you doubt it for one minute.  As my fellow frogs are fond of saying;  Les jeux son't fait!                                                                                                                                                                    
As for the stock market, although, I do believe we are due for a shallow correction in the very short term here, the U.S. can continue to paper things over for a while longer, and yes we can, and probably will continue to drift higher in the intermediate term.  Please be advised however, that this is certainly NOT because your average investors have suddenly found exuberant optimism in the dubious global economic developments of today's modern industrialized world, as the pundits would have you believe.
The actual faux fantasy reason that this market continues to listlessly drift higher, is mostly due to the fact that investors have nowhere else to turn.  The bond market is DOA, saving account CDs have been practically neutered, the USD is being systematically devalued, real estate is dicey at best, and the art market is a freak show.  Let's face it, the capital markets are completely upside down & FUBAR.  The Bernanke and the rest of the global kamikaze money printers, are determined to force you into higher risk equity assets.  So far, they are succeeding beyond their wildest dreams, in this rapacious incendiary dooms day endeavor.                       
Remember the tranquility of Pearl Harbor, just before the flying bombs appeared in the sky........................
Evil Plan 105.0........................Beware the Ides of March!
         BDI Slope of Hope's Idiot Savant

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janus's picture

domo arigato, idiot...good show.

secret, secret...i've got a secret/

i am the Modern Man,

Kilroy (janus)

cranky-old-geezer's picture



Once interest rates get away from the BOJ, even in the slightest, BOOM goes the Bonsai!    

Interest rates won't "get away from the BOJ". 

When you can print currency without end you can keep rates low. 

Simple economic concept.  Over-supply of anything keeps the price down.

You can control the quantity of money or the price of money but not both.

Mauldin is wrong too.  When you can increase the supply of currency without end, you absolutely can keep the price (interest rate) down. 

Amazing how many of these so-called "experts" expect sovereign debt interest rates to rise while unlimited currency is being printed.   They're all wrong. 

Govt debt won't collapse.  Currency will collapse.  

Of course none of these so-called "experts" want to see currency collapse, because it wipes out their paper investments too.

They hope govt debt will collapse instead, why they hope rates will rise.

Not gonna happen.  No way central banks will raise interest rates on sovereign debt now.  They'll just keep printing till the currency is worthless.

janus's picture


i've been waiting nearly two years for a top-quality camel-toe to appear next to some courageous ZHealot's nom de gurre...and so i commend you for both bravery and your taste in camel-toes.

only one question remains...cotton or silk?

i not only love panties, i adore the word itself...just say it aloud -- let its lyric quality fill ya.  pan-tees....seems to intone all manner of feminine mischief (my favorite kind of mischief, btw).

i tell ya what, i could fill the rest of this day and all of tyler's pages eloquting on the wonderful world of women's undergarmets. 

keep up the good work, geezer; you've filled a cavity in my very soul.  if i've said it once, i've said it many more times than that: there is nothing in life that a camel-toe (cuddled up against the contours of a lil cutie's coochie) cannot fix.


Setarcos's picture

Eloquently put with style.  5+

dunce's picture

It looks to me like the plan is for all the countries in the world will print until a large country defaults triggering other defaults of the rest in a domino collapse . Every one will be broke and nobody will get paid , all debts will be counter cancelled. Then these geniuses will begin a brave new world where all are equal with nothing. This will be what they mean by "fairness". Of course to get the ball rolling we must have world govt. along the lines of the eurozone. Anyone who does not believe in hell will no longer have doubt.

Setarcos's picture

About right, except for missing the "war option", which seems increasingly likely, e.g. the Paris Empire's latest move to blatantly recolonize Mali - no doubt with the blessing of the Washington Empire, via Africom.

Add Libya (now gone), Iraq, Afghanistan, Yugoslavia, Panama, and almost countless other wars of aggression, now including Syria, Somalia, Yemen and Iran with economic (sanctions) warfare.

Add in the encirclement of the Russian Federation with missiles and current threats against China.

Arguably WW3 has been bubbling away since the Korean War and/or the "Truman Doctrine" (circa 1947) of pre-emptive nuclear strike on the then-Soviet Union.

The PTB in Washington have been looking for THE BIG ONE for some 65 years and I doubt that they'll miss a chance to launch it.

The PTB?  Well autocrats, oligarchs, plutocrats, banksters and psychopaths generally who have always ended up destroying their empires via never ending wars of conquest.

Alexander the unGreat is the archetypal example, who went on a rampage throughout nearly all the regions currently being conquered whilst creating "hell on Earth", just like today and for the past 65 years of effective World War 3.

Hell was created in Korea (instead of uniting Korea after Japanese Imperial cruelty).

Hell was created in Vietnam, instead of supporting the resistance against the Nippon Empire and French claims in Indo-China, after WW2.  (Do not bother to respond, unless you know history.)

Hell was created recently in Libya and Syria, it just hasn't come to you (nor me) yet, but it will because it always has with empires in decline.

My only possible escape is to die before WW3 is fully actuated.

No way do I envy the young these days.

I don't like being nearly 70, being badly disabled and possibly having cancer again - fourth time - but all that is easy, compared with what Syrians are going through and what billions will experience when the Evil Empire makes the last attempt at global hegemony/NWO/PNAC.

andrewp111's picture

Japan just needs to mint trillion yen coins, deposit them with the BOJ, and make the debt go away.  That way no interest need ever be paid.

steveo77's picture

Deflationistas versus the Inflation crowd 
I posted this survey, which is mostly meant for entertainment and to try out the new "Survey Monkey" which is free html that I added to the post. So far it seems like a great service. 
Here is the Survey, visit and log your opinion. It takes 2 minutes. survey.html  
Here is the first day results inflantion-crowd.html

americanspirit's picture

Ok - apologies to BDI for the wrong attribution. My comments stand - this is a brilliant, hilarious, on-target piece of analysis. Glad to see that others feel the same way.

Bruno de Landevoisin's picture

I enjoy your cigarette brand as well

steveo77's picture

Are you blowing that cigarette?LOL

Miles Kendig's picture

... spectacularly superficial, overly hyped, completely bogus, self satisfied apple pie splendor

Isn't that tarte aux pommes nourriture produit splendia?

Radical Marijuana's picture

I LOVED the poetry in this article! In days when some of the best reporting on economics/politics is published in the Rolling Stone, it is totally appropriate that we perceive "money for nothing and your chicks for free" is to be the new economic business model for the United States!

azzhatter's picture

except chicks are never ever free.

Kelly's picture

Bodacious verboscious bombast, BDI, with just the right amount of balderdash.  Good stuff, amigo. 

Soldier of Fortune's picture


Please, no one misinterpret this inciteful analysis for Mr. Tim Knight's own words.  This is done by none other than BDI (Bob Dylan Idiot Savant) a.k.a. EP (Evil Plan).  Tim Knight lacks the imagination to procure such an elegant tapestry of significant prose.  Mr. BDI has recently made some money in the finacial markets after a 12 month long goose egg shalackin.  Thus, we should pay a bit more attention to this diatribe than we have in the past as it may prove to be a useful money making tool. 

Heed my warning and attention be paid!  Tim Knight has NEVER produced a shred of useful information that was actionable in the markets other than being an almost 100% outcome fading tool.  

Hopefully, Mr. BDI can go 2 for 2 in this new year and not revert to his previous misfortune.  I will say this, it is a bit late to be calling for higher prices and EP's Saul to Paul bullish conversion is a huge red flag to  this reader.

Good stuff!

Non Passaran's picture

What exactly is "actionable" here to the average ZH-er?
Buy gold? I think we may have heard that before.

Bruno de Landevoisin's picture

You may want to re-read last few pargraphs.....actually looking for a pull back here........

lasvegaspersona's picture

alliteration can be over done.

goatmug's picture

Excellent my old friend BDI.


Bruno de Landevoisin's picture

good to see you here goat!  Hope things are well on the home front.....

americanspirit's picture

It's not often - in fact it's almost rare - to see such profound analysis delivered with such rib-splitting funny language. I mean, this is some of the finest cerebral fare I've seen in a long, long time. The author was on a roll, in the groove, on the button, and (let's hope) smoking some excellent bud. because of all the essays I have read in recent months - and I read most of what's worth reading (IMO) on the web - in this one Tim Knight has nailed every single important point.

Plus - did I mention that it's hilarious? Almost - almost - as good as Mr. Panos. Who - again IMO - can never, ever be topped.

TruthInSunshine's picture

The last several sentences of this essay completely contradicts the other claims & theses of the author's:

The Bernanke and the rest of the global kamikaze money printers, are determined to force you into higher risk equity assets.  So far, they are succeeding beyond their wildest dreams, in this rapacious incendiary dooms day endeavor.  

Central planners/bankers are NOT succeeding at getting retail into high risk asset classses. High risk asset classses have thus far been jiggered higher by way of quantitative fiat diarrhea, as retail has essentially continually fled equity and bond "markets" for 4 years running, now.

Bruno de Landevoisin's picture

A little over the top, but very kind of you to say.....merci bien



Bruno de Landevoisin's picture

BDI wrote this piece, he guest posts Sunday afternoon's exclusively on


You can see all his previous Evil Plans on


WTFUD's picture

From my experience of travel, business ( meeting people ) over 20 years all over the planet i highlight the following points and observations :-

1. 9/10 Bankers/ Business folks in europe are fairly hostile at the mention of the chinese and business. am certain it is due to the fact that they are seen as nicking their business, share of the pie! if we examine this then perfectly logical human traits displayed and not really racially motivated feelings fpr the best part. just one guy or business finding greater economies, market forces globally. cant really be a good sport or egg and be jealous of your competitor now, can one. small example, i hate manchester united fc and faithfully (like a sheep, for better or for worse ) love LIVERPOOL FC ( 20 years of Joy followed by 20 years of pain almost ). Question? would i like to see man. utd drop to our current standards or would i want us to rise then surpass their Standards? Simples, no point in paying good money to watch mediocrity!!!

2. Chinese are great mixers and very good company wether in a bar in soho ( euro usa / canada africa china other ) or in the field or jungle digging. me am always happy to see a chinese face when abroad ( yes their becoming the indians of the uk ) and although one or two of them have tried to jump me in the queue at the bookmakers we share a Lot in Common. witness the number of chinese restuarants worldwide; i say thats intent and Not a bad thing. succeed or fail to be admired. off course 10% of business folks are seething because they have been duped by chinese but in general a level playing field globally.

3. In All the gin joints and bars and business/ social all around the world over 20 years i have not shared 10 minutes with any Japanese
sort. end of!!

obvious japanese don't mix well and are more secretive keeping self to self or are so pissed with usa strangling them that they have built a wall around themselves. anyone cookie enough to entertain these mumblings might provide some insight as to why Toyota is number one car sold globally and <1% of us have socialised with the Japanese. very strange i thinks!

FearedDevil's picture

I have been long for 2 years with a trailing stop.  If things fall, so be it - but you are missing the move which must leave you bitter.

NoTTD's picture

Love the Slope a Dope high fade on the haircut.

max2205's picture

Is today 2013 or 1972 or 1968?   Dementia is cruel

cossack55's picture

1789, and since it is monday, we must be in France.

Lumberjack's picture

Mitsubish invests in dutch offshore wind project


IHI (a japanese co that had agreements with A-123) strikes deal with boeing,-...


Chinese firm Wanxiag wins auction for A-123 assets

Fuh Querada's picture

What is a slope-a-dope?

Is Joan Maudlin also one?

SmittyinLA's picture

I like that Ohka rocket plane, they don't need suicide pilots anymore.

de3de8's picture

It's all relative.

blindman's picture

people might wrongly assume that in a currency
war the generals are fighting for the interests
of their respective populations; one might
think that but i don't think that.

cynicalskeptic's picture

The world's currencies are like a bunch of people who jumped out of a plane at 20,000 feet - they're ALL going to go 'SPLAT' soon enough - why speed up the process?

and though they THINK they have parachutes, all that's in those packs is more paper money.... confetti isn't going to stop their fall.....



and the US shouldn't think 'all is well' simply because others may hit the ground before them.....

SmittyinLA's picture

MLK could be Obama's daddy, no seriously 

suteibu's picture

With Abe's new 20 trillion yen stimulus, Japan will borrow over 60% of its debt this year.  The 45% figure was the "limit" set by the DPJ.  The government contributes about 25% of Japan's GDP, so this means that somewhere close to 15% of Japan's GDP comes from borrowed money.  For some reson, this doesn't seem sustainable.

farragut's picture

Good stuff, Bruno.


Zer0head's picture

oh fck, you again

EnslavethechildrenforBen's picture

Our children have a bright future to look forward kill others with drones... or to be killed by others with drones?

That is the question.

WTFUD's picture

Obama in the Highest conundrum NERO'D by a DRONE. O' come ALL ye Faithful Joyful and Triumphant NOT! ! !