‘Gold For Bonds’ in Japan as Bond Buyers Get Gold Coins - May Enhance Returns 5.9 Times

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Tue, 12/06/2011 - 08:37 | 1950343 jcaz
jcaz's picture

Ah, the golden toaster plan- brilliant!

Nothing says your paper is shit better than gold.....

Tue, 12/06/2011 - 08:48 | 1950362 Harlequin001
Harlequin001's picture

So let me get this straight, I lose $129,000 on the worthless paper (that can't be sold without a gold tag to tempt me) but gain half an ounce of gold in the process? The BOJ can take then a fraction of this new money raise and use it to short the same gold they're tempting me with OR alternatively if I can spend my $129,000 on gold bullion, shove the price through the roof and lose nothing... Nah, pure idiocy that one...

Sounds like a bond traders bargain. Sign me up...

 

Tue, 12/06/2011 - 09:30 | 1950470 Long-John-Silver
Long-John-Silver's picture

$129,000 in $1 bills contain 1.650 million BTU. If you are freezing to death Gold can't keep you warm.

Tue, 12/06/2011 - 09:51 | 1950520 Harlequin001
Harlequin001's picture

Damn, wish I'd thought of that before buying all this gold...

How will I ever afford the oil, or the coal?

When you think about it though, if I'm going to pick up some poor fools Aston for a song when he pukes it, it should have a decent heater in it eh...

Tue, 12/06/2011 - 10:11 | 1950600 sqz
sqz's picture

Looks like Kyle Bass was on to something with Japan sovereign debt issues. The timing of this smacks of desperation.

Tue, 12/06/2011 - 12:35 | 1951120 zaphod
zaphod's picture

The Japanese can not affort real interest rates due to their high debt load.

So this means that they plan to service the interest on said debt by selling off their gold holdings.

Yes I'd call that desperate....

Tue, 12/06/2011 - 08:42 | 1950364 Oh regional Indian
Oh regional Indian's picture

Dumb plan. And dumber still the people who buy into it.

Three years from now, all promises will be dust. Imagiine how much gold and silver you can get for 129,000 dollars today.

ORI

/the-plan/

Tue, 12/06/2011 - 09:22 | 1950450 LawsofPhysics
LawsofPhysics's picture

Even better, imagine being paid for your services from these sheeple tomorrow.  Hhmm, maybe the plan isn't so dumb.

Tue, 12/06/2011 - 10:18 | 1950599 bernorange
bernorange's picture

Edit: whoops - I misread the deal.  Never mind...

Tue, 12/06/2011 - 11:01 | 1950754 The trend is yo...
The trend is your friend's picture

ORI,

3 years, really.  That long.

Tue, 12/06/2011 - 10:09 | 1950594 TorchFire
TorchFire's picture

such a callous misuse of the tradition of desire for a silly relic

Tue, 12/06/2011 - 08:40 | 1950352 spankfish
spankfish's picture

Can I be the first to say "Gold Bitchez"?

Tue, 12/06/2011 - 08:40 | 1950355 I think I need ...
I think I need to buy a gun's picture

will ben do that for treasuries in my money market?

Tue, 12/06/2011 - 09:15 | 1950429 cowdiddly
cowdiddly's picture

You have'nt heard about the new .002 gram tungsten commemoratives from the U. S. Mint that witll be issued with evey 100K purchase of 30 year T bonds? Awesome looking coin with Guantanamo on the front and Dick Cheney shooting quail on the obverse.

Tue, 12/06/2011 - 09:30 | 1950471 Help Is Not Coming
Help Is Not Coming's picture

The absolutely crazy thing is that the US mint can mint a platinum coin with any dollar amount on the coin of their choosing. During the debt ceiling debate it was proposed that the US Mint mint several "trillion dollar" platinum coins and then give them to the Federal Reserve as collateral for the FRN. Since it would be a coin minted by the US Treasury it would be lawful money and the US gov't could spend that amount without going over the debt ceiling since they wouldn't have to borrow that money. Strange days indeed.

Tue, 12/06/2011 - 08:41 | 1950357 Robslob
Robslob's picture

 

 

But but but...Gold ISN"T MONEY?

 

Retarded governments worlwide leading people to the slaughter for centuries....

Tue, 12/06/2011 - 10:15 | 1950614 bernorange
Tue, 12/06/2011 - 08:41 | 1950358 bingo was his name
bingo was his name's picture

Welcome back to the gold standard

Tue, 12/06/2011 - 11:16 | 1950801 MachoMan
MachoMan's picture

Exactly.  Inherent in the proposition is the notion that gold is money, has value, and should be valued by bond purchasers...  The problem, of course, is that the proposition is inherently self-defeating in that if the government recognizes gold for what it is, then there is no reason for anyone to purchase the bonds in lieu of gold.  Awkward.

Tue, 12/06/2011 - 08:42 | 1950363 Azannoth
Azannoth's picture

So if I am interpreting this correctly the Government of Japan sees Gold at $260,000 per oz. in 3 years time?

Tue, 12/06/2011 - 08:46 | 1950366 MsCreant
MsCreant's picture

No, they figure they will be dead so they won't have to pay back anything at all.

Edit: True story, had a father in law run up a credit card he never had before a month before he died. 

Tue, 12/06/2011 - 08:49 | 1950376 Harlequin001
Harlequin001's picture

yeah but these gold coins will glow at night for around 120 million years I think...

Tue, 12/06/2011 - 09:03 | 1950399 Azannoth
Azannoth's picture

Depleted Uranium is the new Tungsten in Japan :) Gold in Japan even more Shiny than anywhere else in the world get it while it's 'hot'!

Tue, 12/06/2011 - 08:43 | 1950365 papaswamp
papaswamp's picture

$129,000 for 1/2 oz?.....just buy the gold outright and skip the loss.

Tue, 12/06/2011 - 08:46 | 1950369 AngryGerman
AngryGerman's picture

Japanese gold coin has dragon on one side and samurai on other - mighty gold coin!

Tue, 12/06/2011 - 08:47 | 1950372 MsCreant
MsCreant's picture

Better than the one with the dragon on the front and the queen on the back. What a buzz kill.

Tue, 12/06/2011 - 08:59 | 1950393 AngryGerman
AngryGerman's picture

don't say that! I often fanatsize about the queen. I keep on imagining:

Her - "I am so amused, I am so amused, I am sooooooo amused!"

Me - "For you and England! Yeah biatch!"

Tue, 12/06/2011 - 09:31 | 1950472 mick_richfield
mick_richfield's picture

Lie back and think of the Illuminati.

Tue, 12/06/2011 - 09:06 | 1950408 Kobe Beef
Kobe Beef's picture

Dear MSCreant,

Try Luk Fook Jewelry or other dealers in Hong Kong. They have stunning dragon designs on rounds sold by the gram. Singapore often mints fine dragon designs as well. I too am tired of Queen Elizabeth's ugly mug on all my gold coins. Off with her head! hahaha

 

Cheers,

Beef

Tue, 12/06/2011 - 10:39 | 1950686 flattrader
flattrader's picture

Luk Fook's website sucks.  It's all fooked-up.

Any idea where the rounds might be?

They do have a presence in San Fran...but, I'd rather not make the trip.

Tue, 12/06/2011 - 08:48 | 1950373 paratrooper325
paratrooper325's picture

The whole debt buying thing is, and always will be, a very stupid endeavor. For instance, lets say my neighbor comes to me and opts to sell me his credit card debt with the promise that he will pay me more back by the time he has payed it off. Sound like a good buy? NOPE. Do what papa said, just buy the gold.

Tue, 12/06/2011 - 08:49 | 1950374 bullionbaron
bullionbaron's picture

Interesting to see some similarities building between the last Gold bull market and this one. Potential for Iran & and an energy crisis to once again drive Gold to magnificent highs?

http://www.bullionbaron.com/2011/12/political-energy-crisis-to-drive-gol...

Tue, 12/06/2011 - 08:49 | 1950375 edmondantes
edmondantes's picture

recommendations from Deutsche Bank and Bank of America are a major negative... always best to do the opposite of what is proposed by this gang of lying thieves

Tue, 12/06/2011 - 08:50 | 1950377 ThisIsBob
ThisIsBob's picture

Stole the concept from the Cracker Jack company.

Tue, 12/06/2011 - 08:52 | 1950380 fonzanoon
fonzanoon's picture

The thought process with money printing seems to be the world ends up awash in paper money and becomes worthless. How does that mesh with the fact that the middle class is getting poorer by the day and the lower class is growing substantially as well? There may be a lot of money in circulation but it seems the lower middle class is desperate for some of it? How does that end up being hyperinflationary?

Tue, 12/06/2011 - 09:02 | 1950401 MsCreant
MsCreant's picture

Hyperinflation is poorly named. It is a lack of faith in the currency. It becomes less and less trusted until finally there is a race to get out of it and into something that is trusted. In that race spiral it becomes worth less and less as more of it floods the market. Also, the currency will come flooding back home where it has been stashed in foreign destinations, where it is dumped rapidly, going into the system trying to buy something, anything, of value. Domestic dollars compete with those dollars and it takes even more and more of them to get stuff. 

Inflation happens because of printing. Hyperinflation is a loss of faith in the currency once folks think the currency is shit.

Tue, 12/06/2011 - 09:07 | 1950412 fonzanoon
fonzanoon's picture

I do believe that to be true, but if you use the U.S as a test case for that. It is pretty clear that 99% of the population do not end up seeing any of this money. So when it comes flooding back it will go to a tiny percentage of the population. The 99% will still be on food stamps begging for that next dollar. On a related note if every country seems to be in a financial mess who are the owners of the massive amounts of dollars right now that will eventually send them back here when they lose faith?

 

Tue, 12/06/2011 - 11:36 | 1950854 MachoMan
MachoMan's picture

I'll quote spitzer and say that the amount of printing necessary to cause hyperinflation has already occurred...  Think gonzalo lira - failed auction...

Tue, 12/06/2011 - 09:06 | 1950407 The Proletariat
The Proletariat's picture

The value of $1 is worth less and less and less and so on......

Tue, 12/06/2011 - 09:10 | 1950420 fonzanoon
fonzanoon's picture

"The value of $1 is worth less and less and less and so on......"

Agree completely. It just seems that the masses in this case would not lose faith in the dollar, they would be desperate for more of them.

Tue, 12/06/2011 - 09:12 | 1950427 HamyWanger
HamyWanger's picture

Only libertarians say that inflation is catastrophic. 

Actually, it isn't. It is just a redistribution of wealth, namely a transfer from the higher-middle-class and the improvident rich into the pockets of the government, and the poor by ricochet.

Given that most Americans don't have liquid savings (their holdings are composed of real estate, debt and Social security/retirement income wich is and will be adjusted for inflation), they won't see anything. 

Only the extreme minority of savers will see their holdings melt, but as an even more extreme minority has a clue what inflation is, and as the banks will offer everyone falsely CPI-adjusted contracts, there won't be any public uproar. If you go out of the microcosm and table jerk of Zerohedge and Bloomberg, nobody gives a fuck about Bernanke or QE2. 

Inflation has been the solution chosen by all European rulers across the XXth, XIXth and XVIIIth century when facing economic difficulties for a reason. It is much more popular to the public than upright defaults and liquidations of big and well-known companies. Also, inflation never menaces national security, as it tends to reinforce the State and the military at the expense of the people. Even hyperinflationary vicious circles are not a danger for States: the ruler may be toppled in a coup, but goverment services always remain intact. Contrary to default which would dramatically reduce its size and power.

Tue, 12/06/2011 - 10:13 | 1950605 Henry Chinaski
Henry Chinaski's picture

Hamy, you are right to a certain degree.  The slow simmer of inflation was a nice racket for a while.  Unfortunately TPTB got greedy, arrogant and out of control.  The frenzied fraudulent pillaging of the middle class has gone too far.  Nobody even tries to hide it anymore.  The system is both unsustainable and unstable.  A phase shift seems unavoidable, not because of inflation, but because of people's apostacy from natural law.

When my children were born, they received gifts of savings bonds from grandparents and other friends from the greatest generation.  A few years ago, I woke up to the inflation racket.  I exchanged their series E bonds for the equivalent (several tubes) in silver Maple leafs at $15/oz.  My children are old enough to understand basic economics and the inflation racket.  I will pass along to them a healthy stack of real money some day and no person or goverment will know about it.

Tue, 12/06/2011 - 09:00 | 1950396 JamesBond
JamesBond's picture

so the claim is that the debt matures at .05% and gold over 5% and the BOJ wants you to purchase the debt.

drunk japanese business men are a hoot at midnight don't ya know! 

Tue, 12/06/2011 - 13:33 | 1951353 Matt
Matt's picture

You don't get it. They don't want us to buy the bonds. They only want Japanese nationals to buy the bonds. They specifically want them to be unattractive to foreigners while simultaneously rewarding their citizens for patriotically buying more bonds. That way their gold sales only go to their own citizens, and it all stays in Japan.

Tue, 12/06/2011 - 09:02 | 1950400 orca
orca's picture

According to rumours, the gold used for the comme...cumminge... special coin was recently transferred from the special Tepco storage facility at Fukushima. A Finance Ministry spokesman declined to comment on reports that the coin is that special it even glows in the dark.

Tue, 12/06/2011 - 09:06 | 1950409 thorgodofthunder
thorgodofthunder's picture

Just shows how gold is latest fad- in 1999 you would have been given a share of pets.com, in 2005 a free month interest on your sub prime mortgage, in 1955 a free toaster when you opened a bank account.

Technology is the new gold. The rocks themselves have no further use.

Tue, 12/06/2011 - 09:11 | 1950423 MsCreant
MsCreant's picture

How do you store the value the tech embodies?

Tue, 12/06/2011 - 09:35 | 1950482 mick_richfield
mick_richfield's picture

Actually, I think silver is the new gold.

Tue, 12/06/2011 - 09:10 | 1950418 youngman
youngman's picture

Well with the Cesium in the baby food now....Japan won´t be around to much longer as all the kids will be dying....

Tue, 12/06/2011 - 09:14 | 1950433 ziggy59
ziggy59's picture

Should get the toilet paper aka bonds for free after spend 129000 on pms!

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