Japanese Government Demands BOJ Do QE 9 One Month After Failed QE 8

Tyler Durden's picture


Almost exactly a month ago, the BOJ surprised most analysts with an unexpected increase in its asset purchase agreement by JPY10 trillion bringing the total to JPY80 trillion. There was one small problem though: the entire impact of the additional easing fizzled in under half a day, or 9 hours to be precise. This was, as Art Cashin summarized the following day, Japan's failed QE 8. It is now a month later, and with nothing changed in the global race to debase status quo, the time has come for the BOJ to attempt QE 9. Or that's the case at least according to the toothless Japanese government, which has formally demanded that Shirakawa do a nine-peat of what has been a flawed policy response for over 30 years now, this time with another JPY 20 trillion, or double the last month's intervention. Because according to Japanese Senkei, it is now Japan's turn to pull a Chuck Schumer and demand even mor-er eternity-er QE out of monetary authority of the endlessly deflating country. In reverting to the Moore's law of failed monetarism, we expect that a QE 9 out of Japan will have the same halflife as QE 8, if indeed the program size is double the last. At which point it will again fizzle.

From Senkei via Bloomberg:

  • Govt. is asking Bank of Japan to increase its asset-purchase program by 20t yen, Sankei reports, citing an unnamed government official.
  • Program would be increased to 100t yen from current 80t yen: Sankei
  • Increased fund likely to be used to purchase long-term JGBs, ETFs and J-Reits: Sankei
  • BOJ is expected to lower economic growth, inflation forecasts in an economic report due Oct. 30: Sankei

In other words, "Get to work, Shirakawa-san." One of these days the trillions and trillions in new fiat injected will actually "work"- at that point Japan will look back at its days of deflation as a fond memory when living through the alternative.

But at least nobody pretends anywhere, anymore that the central bank of a country is apolitical: neither the ECB, which is openly using its various monetary programs to finance insolvent countries, nor the Fed, which is buying up all gross Treasury issuance longer than 10 Years, and now the BOJ, which is openly taking requests from politicians who are totally helpless to do anything to the Japanese economy on their own.

The good news is that the Keynesian singularity, where QE XYZ+1 has to take place every nanosecond just to keep the world in one place (courtesy of the magic of a closed fiat loop in which devaluation is always relative to everyone else, and is limited only by the speed of the central printer and toner inventory), is getting ever closer and closer...

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tooriskytoinvest's picture

Two causes of the 1987 stock market crash have reappeared today


The World Is Moving Closer To A Full-Blown Currency War Just Like The Great Depression of The 1930s.


Marc Faber: 'Reduce Government by 50 Percent Or The System Is Going To Break'


YuropeanImbecille's picture

The world is seriously going down the shitter!


The only ones laughing are the money changers..

Jason T's picture

they are wondering, "why are you reciting our credits?"

YuropeanImbecille's picture

Because sadly Americans do not understand that 100% of all the people on that list are jews.


Still in the US all the liberals and right wingers adore and love the jew, and would give their own life just to make sure the jew has another Oz of gold in his pocket.


Sad but true

bushwarcrime's picture


I spent all day in Osaka yesterday and there isn't a whiff of desperation in the air, other than the 2 homeless guys I saw.  The designer  bags and black stockings were flowing like water.  Didn't see any beautiful jewish ladies though unfortunately.

YuropeanImbecille's picture


Jews have been running Japan since 1945. Ask the black belt master and satanist jew Henry Kissinger

bushwarcrime's picture

yea in 1945 they figured was a good time to corner the market in dystentary, nuclear fallout, smallpox, poverty , famine, gonhorrea, syphillus, and every other kind of human misery possible

just think fellas in 1965 this hell hole will begin to stop stinking of human waste and you'll reap millions

or is that just nation building from the burnt out remnants of a civilization to a prosperous one? look up zaibatsu

you fucking filthy piece of shit

Bogdog's picture

the antisemitism in this blog is getting tiresome. fucking nazis.

The Gooch's picture

Anyone notice a distinct, common thread there between the majority?

I thought so.

q99x2's picture

List added to revolution archive.

otto skorzeny's picture

I'm diggin' on your list but be careful-you may be "suicided"

Jimmy Carter was right's picture

How many on that list are American?


Ineverslice's picture


We give more riquidity.

AUD's picture

What you're not getting ZH, is that the assets of the BoJ are already F- junk, so the Yen cannot be 'debased' further. That the Yen still trades as anything even remotely resembling money, is testament to the infinite stupidity of the human race.

Tyler Durden's picture

Incorrect: the BOJ can and will create reserves by diluting its assets (i.e. monetize more ETFs, more stocks, more Hello Kitty lunchboxes, more condom wrappers, more, more2, moremore) to infinity.

And here is the kicker: so can every other central bank with a printer!

The magic of a fiat world - infinite dilution, at which point you have fiat collapse: aka the monetary singularity. Some even call it hyperinflation.

AUD's picture

That explanation presumes that value is a function of quantity. It isn't.

Value is given by quality. You value a woman for example, based on her quality. If you don't, then that just makes you a dumb slut.

Money is no less desirable than a woman of quality, why consider its value given by quantity?

The fact is, the 'assets' of the BoJ are already complete shit. The Yen is junk & hyperinflation could happen at any time. That it hasn't happened already is testament to the infinite stupidity of the human race, or, it is a credit bubble of inconceivable magnitude. And I'm not just picking on the BoJ here, the obligations of the Fed are junk too, so to the ECB....

An old Welsh Justice, mounted on a goat.... Is asked which way his Worship means to trot.... To London he is travelling, quoth he.... To sell Welsh copper, and to buy South Sea....

It doesn't matter what central banks do. The financial 'markets' will behave like an irrational credit bubble, because that's what they are, until one day, they don't.

clymer's picture

My sincere apologies, I stopped reading at "if you don't, then that just makes you a dumb slut"

Because it was at this point that I said to myself, "self? he's right. You are a dumb slut."

Damn, I love being a dumb slut. I think I will say it a few times




Tyler Durden's picture

it is quality and quantity, with the BOJ (and Fed) monetizing progressively more risky assets, thinking they are forcing investors to buy what residual assets are left, when instead all they succeed in doing is being frontrun. This was explained here.

The biggest paradox for those who are not steeped in (flawed monetary) theory, is that by monetizing the primary signal of long-term inflation (and thus forcing others to buy it ahead of time): the long bond, the central bank of country X shoots itself in the foot, because while it tries to prompt inflation, and thus LT rates rising, all that is achieved is LT rates collapsing even more, thus never being able to telegraph a rise in inflation expectations which instead materialize suddenly and unexpectedly as inflation reality through the commodity channel (i.e., hard assets).

gwiss's picture

So, you're saying it's a race between the collapsing value perception of paper capital brought about by monetization and the accompanying collapse of government power.  

On the one hand we have monetization, which is a process of trying to force total debt to at a minimum stay static but preferentially expand by slowly and methodically raking in all the debt markers within which people can deposit their imaginary electronic "savings" until there is no vessel left to put these electronic bits into except new debt, and if this means replacing all marketable debt with FR debt by exchanging all open market debt for Federal Reserve liabilities, so be it. However, with the Federal Reserve balance sheet currently at $2.8 trillion and total credit market debt at $54.5 trillion as of Q4 2011, this exchange process has a long ways to go, although its non-linear exponential trajectory is deceiving.

As the Federal Reserve financialization program of flushing the quail of savings out into the open by covering all existing debt instruments with matching Federal Reserve liabilities proceeds apace, the money making strategy ceases to be buy and hold for yield and instead becomes frontrun the Fed and buy for price increases with the Fed assuming the role of greatest idiot willing to be the last buyer of everything.  So the market adapts to surf just ahead of the event horizon of monetization, which is the last point at which a debt instrument is openly traded and therefore has any market price visibility before crossing the event horizon and vanishing into the opaque black hole of Federal Reserve holdings, leaving behind a static picture of its "value" floating on the event horizon, which the Fed uses to calculate a supposed but entirely fictitious market value of its balance sheet. This destroys the real value perception of debt by making it worthless unless its price is moving.

And on the other hand we have declining true government economic power, for as open market debt instruments are replaced by Federal Reserve liabilities, the Fed and therefore the Government find that faith in the relative value of their replacement debt instruments declines as more and more flood onto the market, and thus as they seek to grab more and more economic power by fiat they paradoxically find that they have less and less, which is steadily echoed in the increasing relative value of physical commodities when compared to their replacement debt instruments.

Where the footrace turns parabolic is when the Fed and the Government cross that invisible boundary and citizens of all nations viscerally recognize the ultimate destination of the exchange value of FRN and US government debt. The question is, where is the line that represents the limit to what the Government will attempt in order to force the perception of value back into its debt instruments?  Does it have one?  As the exchange rate of Government debt instruments in exchange for physical commodities reaches an infinite singularity, does the extent of force the Government is willing to utilize to force the perception of value back into its debt instruments and therefore regain power also reach an infinite singularity?

LMAOLORI's picture



How right you are Tyler and on that note Surprise


Oct. 22, 2012, 3:03 p.m. EDT

Fed considers upping QE3 size and language


(Just Kidding I know this shouldn't come as a surprise to ZH readers)


A Ponzi Scheme Called America



Japan's Choice: Shrink the Welfare State or Collapse




Mentaliusanything's picture

First rule of Business - No one wins a Discount War. Its a race to bankruptcy

fonzannoon's picture

i am would love to see the japanese bill gross tweets

edit these androids suck. just had a text message go up as a reply on here. crazy fn phone

lolmao500's picture

They need to learn from the master and do QE Infinity!

Rainman's picture

And here is Chairsatan mucking around with mere billions while the Japanese are winning the gold medal with trillions.

                                          FORWARD bitchez !

Worker Bee's picture

And still no hyperinflation....ROR!

otto skorzeny's picture

the Bernank fears deflation like its the plague

JustObserving's picture

Govt. is asking Bank of Japan to increase its asset-purchase program by 20t yen

That is only $250 billion (3 months printing by Bernanke).  That should be good for a month or two.  Why are gold and silver not skyrocketing?  How many billions is the Fed spending to put a lid on gold and silver?

Just the printing by US and Japan is enough to buy all the silver bullion in the world four or five times over every month.

Zap Powerz's picture

Relax.  I evaluated a new medicaid patient today.  She had a new iPhone and couldnt stop texting during my assessment.  It was nice.

So if you can be on welfare and still afford an iPhone, all is right in the world and we have nothing to worry about.

emersonreturn's picture

Zap Powerz...your patient may be a working girl...a client gave it to her or her pimp...or it may be stolen, apparently cell phones are the highest theft item now...with it goes the victim's card information and basically all their numbers and keys to their accounts, life.

otto skorzeny's picture

I am so ready to check out of The Hotel America-but I can never leave

mendigo's picture

speaking of cell phones - rates are going up big time
Verizon is pushing everyone into smart phones at worsening rates
I have 4 lines with them for about ten years and I've had it
the cheap services are starting to look interesting

rosethorn's picture

Japan's now running a trade deficit.  The only thing that gives them a current account surplus is their foreign investments.  QE-Japan no longer functions as a yen weakener.  20 trillion yen proposal and the dollar/yen doesn't budge.

mendigo's picture

wouldn't it be fairly conventional policy that Japan would ease to bring down the yen? what's up with the yen that it won't come down. is that thing going to snap or what?

chump666's picture

Meanwhile China is blowing it's own legs off.  It's done.

*RTRS report states bank lending in China rebounds sharply in Q3

+ inflation and inventory write-downs.

What a mess.

Pairadimes's picture

Fuck you, Bernanke-san!

fijisailor's picture

Hey tyler that's not fair showing monopoly money being used so carelessly.  There are limits in monopoly unlike QE reality

tocointhephrase's picture

Too true, at some stage the bank runs out of money and all the houses are belong to us!

Atlantis Consigliore's picture

Ohai Yo fuckinassisan:  20 trillion printing Bernankesan,  then more deficit then 50 trillion, Barnanke san....

so solli,  exports down 10%  next month down 20%  then down 1/2.

yen, is soylent green, its people let them cannibalise their economy, and eat the old peoples bonds. ...worthless. 

hedgehog9999's picture

Japan is fucked and they know it, Between Fuckushima, their demographics and their QE forever policies , all they need is another major earthquake which is coming and that will be it!!

Incidentally, I think that will be the fuse that will blow up the world financial system. The Drag and Ben have probably managed to postpone the collapse for a bit longer. Not sure about Japan....... 

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Zero Govt's picture

"Japanese Government Demands BOJ Do QE 9 One Month After Failed QE 8"

These 'solutions' don't last long ..in fact now 8 have failed isn't it time for a re-think or are we dealing with the Dept of Kamakazi bang-your-head-against-a-brick-wall politicians?

Ask Timya, Bubbles Ben or Krugman, they'll say economic recovery is simply down to your print speed setting. Productivity just springs from central banks ink squirters, spraying them all over the losers and debt-junkies of WS and DC is quite the smartest thing to do


AndrewJackson's picture

I am just wondering when they are going to finally give up on asset purchases and start writing checks to the general population. Maybe it will be here by QE infinite (itteration # 17).

Mad Mad Woman's picture

The party's over.............

Major pain & suffering to follow. 

BigDuke6's picture

More pain for the nips...

Less pain for tuna and whales.


mendigo's picture

I believe inflation is taking hold big time but its in pockets - they are watching the headline numbers but its creeping in
regular clothes in most stores are now crap - I can't bring myself to pay for the plastic crap they are selling
cell phone bill is skyrocketing
paying 4.50 for a loaf of bread unless I get it on sale which I usually do
paid 3.75 for a basic greeting card a rite-aid
a little while ago I was paying 25/month for internet now best I can do is $40
every is grabbing for margin but where is the extra money going to come from?