Japan's Misery at 33 Year High… Because of Inflation

Phoenix Capital Research's picture

Yesterday, we warned that the Fed was playing a dangerous game with inflation.

Today, we want to take note that the Fed is in fact just one of the Central Banks doing this.

Indeed, in Japan inflation has already begun to take off, driven by the Bank of Japan’s $1.4 trillion QE program.

Bloomberg notes that inflation has weakened the yen by 6.8% in the past 12 months… and the cost of living in Japan is now at a five year high.

We’ve highlighted the critical parts in the below article for your review.

The misery index, which adds the jobless rate to the level of inflation, will climb to 7 percentage points in the three months starting April 1 when Japan raises its sales levy to 8 percent from 5 percent, based on the median estimates of economists in Bloomberg News surveys of unemployment and consumer prices. That would be the highest level for the measure since June 1981 when Japan was emerging out of depression after the oil shocks in the 1970s.

Bank of Japan monetary stimulus designed to spur economic growth and achieve 2 percent inflation has weakened the yen by 6.8 percent in the past 12 months, eroding the value of wages to a record low. Abe, the son of an ex-foreign minister who grew up in a house with servants, is under fire from the opposition party after the cost of living surged to a five-year high.

http://www.bloomberg.com/news/2014-03-11/misery-index-rising-to-33-year-high-on-abenomics-japan-credit.html

Japan’s Prime Minister ran on a platform of creating inflation to drive growth. He’s now finding out that inflation and growth do not go hand in hand (inflation actually eats into growth by debasing the currency).

This is a real problem for Japan… and the rest of the world. Global Central Banks have printed over $10 trillion in the last five years. This money is seeping into the financial system, pushing up the cost of living everywhere.

In Japan, it’s pushed the misery index to a 33 year high. Who knows what it will do for the rest of us.

For a FREE Special Report on how to protect your portfolio from inflation, swing by

www.gainspainscapital.com

Best Regards

Phoenix Capital Research

 

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toadold's picture

Read a small article that some in the Fed are getting nervous about an exponential ramp up in food prices.  Apparently once food prices start inflating the speculators start to use easy money to buy food commodities futures on margin then the rest will pile in.  Given what diseases and weather has already done to food prices things could get nasty  real quick.  Rock, Hard Place, politician's testicles. 

I see the price of Spam is rising .  

Philalethian's picture
Nikkei 225 (^N225)

-Osaka 14,327.66 down 488.32(3.30%) 2:00AM EDT     Dow down 1.41% Nasdaq down 1.46%

Duc888's picture

 

 

Fuck 'em, they're not hurting yet.  They're not selling spare kidneys and organs on the street corner.  Let them suck a little bit more of the bankster dick.  They might come around in another thirty years or so.

 

ps, are organs worth less money on the black market if they're radioactive?

SAT 800's picture

Coming soon to a currency unit near you. Very near you.

Eeyores Enigma's picture

You finance oriented F*#ks always like to boil it all down to policy.

Japan's misery is the fact that it needs to import 90% of what it consumes and the financial hyjinks are not cutting it any more.

Extrapolate this TRUTH around the world and you might begin to understand whats going on.

AdvancingTime's picture

If investors in Japan's government bonds begin to believe that Abenomics will be successful in dropping the value of the yen and in bringing back inflation it would be logical for owners of JGBs to move out of the securities and buy foreign bonds or equities. This will place upward pressure on Japanese bond yields and raise the cost of government to service its massive debt.

Domestic investors have already started venturing overseas for higher yielding assets. If the value of the yen falls more than the stock values in Japan rise getting money out of Japan will be the only way to protect your wealth. As this turns in to a tsunami of money fleeing Japan and becomes a feed back loop that fuels itself it will constitute the end of the line for those holding both JGBs and the yen. Details in the article below.

http://brucewilds.blogspot.com/2013/08/japans-economy-going-forward.html

harleyjohn45's picture

How true markar,  Japan has problems from all fronts and china is going to whip their a$$ on top of that.

kaiserhoff's picture

This was Abe's "plan" if it deserves that much respect.

As Dr. Phil likes to say, how's that working out for ya?

markar's picture

Japan's misery is only beginning. Wait until the country is largely uninhabitable due to Fukushima. It's a dead country walking.

Manthong's picture

Inflation spurs growth quite nicely

…of poverty.