“If Just 1%Of Japanese Pension Assets Shift Into Gold, The Gold Market Would Explode”

Tyler Durden's picture


Last night we reported that in the encroaching attempt to globalize the fiat ponzi regime, in Japan's latest rush to crushTM (sounds even better than race to debase) its currency it would proceed to monetize even more debt, only not its own debt - a strategy that has failed miserably to stimulate inflation for the past 30 years - but that of Europe.

So far so good, and perfectly expected in a monetary lunatic asylum in which coining money without an appropriate collateral backing is actually considered sound monetary policy by Nobel prize winners.

What gives us some hope that there may be at least one sane voice left in the wilderness is the far less trumpeted news overnight that "Japanese pension funds, the world’s second-largest pool of retirement assets after the U.S., will more than double their gold holdings in the next two years as the new government pushes for a higher inflation target, according to an adviser to the funds. Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present." The reason for the move is fear that Abe is actually able (unlike last time when his failure was accompanied by an inexplicable case of career-ending diarrhea) to hit his goal of 2% inflation, without in the process sending bond yields so high all tax revenue goes solely to cover interest expense on the JPY 1 quadrillion pyramid of debt and rising. Which, incidentally, according to many traders is the reason for the move higher in gold prices today.

From Bloomberg:

Mitsubishi UFJ Trust and Banking Corp., which introduced Japan’s first gold ETF in 2010, expects assets held in the product to double over the next several years from 26.2 billion yen as of Nov. 30. Global investors are holding a near-record amount in gold-backed ETPs that are valued at $139.6 billion, data compiled by Bloomberg show.


Assets held by corporate pension funds in Japan amounted to 72.24 trillion yen as of March 2012, declining 0.9 percent from a year earlier, according to Yasuo Sugeno, director at Daiwa Institute of Research in Tokyo. Of the total, about 72 billion yen were allocated to commodities including gold through hedge funds, he said Dec. 10.


Government Pension Investment Fund of Japan, the operator of the world’s largest pension fund with 113.6 trillion yen, stays away from commodity investment as 67 percent of their assets were allocated to Japanese bonds, Sugeno said.


Japanese pensions oversee $3.36 trillion, according to human-resource
and consulting services company Towers Watson & Co.
pension funds in Japan will diversify 72 trillion yen in assets after
domestic stocks produced little return in the past two decades,
according to Daiwa Institute of Research.

So after the rotation, paper gold holding will double to a whopping... 0.03% of all pension fund assets! Now imagine what happens to the price of gold if Japan does indeed succeed in generating inflation, and pension funds scramble to push 1, 2, 5% or more of their assets into gold. Sure enough:

Perhaps it is time for the punditry and the chatterbox media to start considering what happens not when the much anticipated rotation out of bonds and into stocks, which has not happened for 4 years now, and won't, at least not until the government bond bubble finally pops which will only happen when the central banks finally lose control, but what happens if even a tiny amount of the global pension capital allocated to bonds and/or equities, is rotated into gold.

“Pension money invested in bullion is ‘peanuts’ at the moment,” Toshima
said. “If 1 percent of their total assets shift to the metal, the gold
market would explode.”

Could not have said it better ourselves.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 01/08/2013 - 12:56 | 3133143 jonan
jonan's picture

gold-ichiwa, bitchez...

Tue, 01/08/2013 - 12:58 | 3133151 The Juggernaut
The Juggernaut's picture

Fucking do it then!  Rush to crush was a college game.  Girls loved it.

Tue, 01/08/2013 - 13:07 | 3133188 Buckaroo Banzai
Buckaroo Banzai's picture

It's just like if someone threatened to ban, say, something plentiful and readily available like "Assault Clips" (ROFL), then suddenly there wouldn't be any available, at any price, anywhere.

Or something like that.

Tue, 01/08/2013 - 13:19 | 3133244 Snakeeyes
Snakeeyes's picture

Sod Japan. How about a simiar amount from The Fed's blob-like spreadsheet!


Tue, 01/08/2013 - 13:36 | 3133315 BaBaBouy
BaBaBouy's picture

The CB FIAT Printing And GOLD Manip Will End Soon, This YEAR, Bitchezzz.

GOLD will be the Star.


Tue, 01/08/2013 - 14:15 | 3133463 strannick
strannick's picture

Unfortunately, if they've been naive enough to buy Japanese bonds, they will be naive enough to buy GLD

Tue, 01/08/2013 - 14:50 | 3133607 trav777
trav777's picture

article is total BS.  ETFs can expand infinitely to accommodate influx of monies.

It's not real gold...it is options to have gold or promises to possibly deliver gold if they don't have to go to too much trouble to get it.

ETFs and the lot permit the manufacture of infinite ounces of paper gold and a mechanism by which cash can settle in lieu of real material.  Even allocated accounts work this way.

Tue, 01/08/2013 - 16:23 | 3133938 Real Estate Geek
Real Estate Geek's picture

I wouldn't call it BS, but iI must admit I kept looking for the Goldcore byline

Tue, 01/08/2013 - 13:41 | 3133341 SAT 800
SAT 800's picture

yeah; something like that. I think it's called supply and demand; but that's unnecessarily confusing. I pointed out, until I got tired of pointing it out; the Silver Bullion Market, (talking about what's actually available to buyers, ok?), is so small that a couple of rich families in Europe could get together an buy the whole fucking thing. And they might. Why not? The Silver market is like the powder hold in a an old wooden sailing ship; it might not explode; but then again it might; and it takes so little to do it. Capitalists love corners on markets. If you were clever you could sell 14th. of your holdings back into the screaming maw that had become the market, (with no silver available), and get your money back and keep the other t/4ths of the Silver for free. I find it very helpful to consider these kinds of scenarios when the market is depressed and not rallying, like it is now. (the silver market).

Tue, 01/08/2013 - 14:53 | 3133627 trav777
trav777's picture

why the hell would someone want to buy the silver bullion market?

You silverbugz need to have your heads examined...praying for a market corner so you won't be a bagholder

Tue, 01/08/2013 - 15:49 | 3133820 vamoose1
vamoose1's picture

super  post      it  amazes  me  that  half  a  dozen  hedge  funds   dont  quietly   informally  co ordinate  themselves   and   blow   those   thieving   motherfuckers  at   jp  morgue   off  the   fucking   face of  mother  earth 

there  is  such  a  thing  as  a  laydown  trade ...  they  are  admittedly  rare  but   from  time  to  time  they  occur ...  silver  has  a  33  year   double  top  at  50,  unheard  of  in  the  history  of  technical   analysis   take  out  50  and  its   67   the  same  day   headed  for  triple   digits

Tue, 01/08/2013 - 13:08 | 3133193 Pladizow
Pladizow's picture

If this Jananese "Gold Backed" ETF has a prospectus anything like the GLD, these Japanese pensions will NOT own any gold!

Tue, 01/08/2013 - 13:14 | 3133196 vast-dom
vast-dom's picture

WRONG! Gold will not explode up until the ponzi scam suppression is removed, even if they buy in 10%! Don't you get it yet Tyler? Gold should already be well above $2,000. 

Tue, 01/08/2013 - 14:15 | 3133364 Anasteus
Anasteus's picture

It's practically impossible to prevent gold price from rising once the positive sentiment toward physical metal starts prevailing worldwide, regardless of the degree of suppression. The risk of default would increase beyond acceptable limits; the COMEX market would collapse literally in hours (or nanoseconds). And if this were to happen the price would skyrocket not to the Moon but to the Sun.

And that is what's happening right now; a shift from paper to metal perception of gold. The fact that gold is not well above $2000 costs the manipulators probably an incredible amount of effort in order to preserve perhaps the last remnants of the paper gold illusion.

Tue, 01/08/2013 - 14:13 | 3133470 johnnymustardseed
johnnymustardseed's picture

Because they know that JPM would smash it again. Apparently the FED has decided that $1650 on gold and $30 on silver is a safe number for the fiat and that is where it will stay for now.

Tue, 01/08/2013 - 15:54 | 3133826 vamoose1
vamoose1's picture

well  put       the  operative   words  being        for  now

Tue, 01/08/2013 - 12:59 | 3133153 EL INDIO
EL INDIO's picture

How do you say bitchez in Japanese ?

Tue, 01/08/2013 - 13:04 | 3133177 TheFourthStooge-ing
TheFourthStooge-ing's picture


How do you say bitchez in Japanese ?


Tue, 01/08/2013 - 13:08 | 3133197 EL INDIO
EL INDIO's picture

Sounds like Pokemon !

Are you sure ?

I don’t want to order my T-shirt with a word that means something else.


Tue, 01/08/2013 - 14:34 | 3133543 jonan
jonan's picture

BTW, the literal translation of "teme" is just a rude way of saying "you", rather than saying the more respectful form of "you" which is "anata"...you really gonna put "teme" on a t-shirt?

Tue, 01/08/2013 - 19:36 | 3134483 TwoShortPlanks
TwoShortPlanks's picture

The word you're after is "douseiaisha".

Tue, 01/08/2013 - 13:41 | 3133342 forwardho
forwardho's picture

Crap, I just got a cool tatoo with that ideogram at the center.

They told me it meant "recieves abundantly"


Tue, 01/08/2013 - 13:38 | 3133299 Tango in the Blight
Tango in the Blight's picture


..according to Google translate.

Tue, 01/08/2013 - 14:30 | 3133527 jonan
jonan's picture

???   (teme)

(cue jap accent and dramatic pronunciation) TEEEeemmmEEEE! gold-itchiwaaaaaaAAA!

*edit, lol hiragana characters come up as "???"

Tue, 01/08/2013 - 20:00 | 3134533 BigInJapan
BigInJapan's picture

Closest would be Kuso-onna.
It means "shit-woman".

Tue, 01/08/2013 - 13:16 | 3133231 Bangin7GramRocks
Bangin7GramRocks's picture

And if my nut-sack didn't have wrinkles it would be a tennis ball!

Tue, 01/08/2013 - 15:06 | 3133678 catacl1sm
catacl1sm's picture

I'm gonna put THAT ^^ on a T-shirt!

Tue, 01/08/2013 - 13:45 | 3133362 NIRee
NIRee's picture

In all honesty, with keynesian policies the focus is always to avoid the end game when the going gets tough.

So calling their debt policy a failure when kicking the can down the road is the strategy is not very clever. If anything they are the masters of fiat currencies.

Tue, 01/08/2013 - 14:32 | 3133536 Silver Bully
Silver Bully's picture

Yeah, yeah, yeah. The Japan Post Bank sits on one of the biggest piles of private cash (possibly the biggest pile) in the world. It is also the biggest holder of Japan's debt. If it even sniffs at the gold market, people will sit up and take notice. But they haven't and they won't. I mean, I'd like Ben Bernanke to give me a check for a billion dollars too, but it isn't going to happen (unless bread costs $1 million a loaf)


Tue, 01/08/2013 - 12:57 | 3133148 lolmao500
lolmao500's picture


Surprise: We Might Hit The Debt Ceiling Two Weeks Earlier Than Expected Ooops.
Tue, 01/08/2013 - 13:13 | 3133215 LawsofPhysics
LawsofPhysics's picture

30 billion in interest daily?  Something seems amiss.  More importantly, to whom is all that interest going?

Tue, 01/08/2013 - 13:21 | 3133249 NotApplicable
NotApplicable's picture

Why widows and orphans, of course.

Tue, 01/08/2013 - 12:57 | 3133149 Freddie
Freddie's picture

Platinum Trillion Dollar coins - Bitchez!   I call them Krugmans.

Tue, 01/08/2013 - 12:59 | 3133158 Lost Wages
Lost Wages's picture

If this happens, I'm calling silver at $30,000,000,000 per ounce.

Tue, 01/08/2013 - 13:04 | 3133176 lolmao500
lolmao500's picture

I would be a quadrillionaire then!

Tue, 01/08/2013 - 13:06 | 3133181 EL INDIO
EL INDIO's picture

Assuming that Timmy had in mind a 1 oz coin, at 1574/oz Timmy wants a 635,324,015 % devaluation ! That’s what you’d call Hyper Inflation.

He must have attended a training course given by Zimbabwe’s central bank.

Tue, 01/08/2013 - 15:18 | 3133730 trav777
trav777's picture

dat be rayciss...what happened in rhodes, i mean zimbabwe, was all white people's fault

Tue, 01/08/2013 - 15:57 | 3133839 vamoose1
vamoose1's picture

   gideon  gonzo   presiding

Tue, 01/08/2013 - 13:00 | 3133163 Falconsixone
Falconsixone's picture

Maybe they're afraid the island would flip with the extra weight or maybe rockschilds told them they'll have to get rid of the radiation first.

Tue, 01/08/2013 - 13:01 | 3133165 fonzannoon
fonzannoon's picture

if they keep buying paper gold my guess is the banks will keep finding a way to make sure there is enough paper available.

Tue, 01/08/2013 - 13:05 | 3133178 Hyde_The_Id
Hyde_The_Id's picture

Hello BITCHES!  You are now in the presence of greatness.

Tue, 01/08/2013 - 13:11 | 3133198 fuu
fuu's picture

Grats on your first ever post after 45 weeks.

Tue, 01/08/2013 - 13:25 | 3133262 NotApplicable
NotApplicable's picture

It's time to play... Name That Sock-Puppet!


First clue: Obnoxious asshole.

 Hmmm... that doesn't narrow it down much.


Stay tuned for more clues!

Tue, 01/08/2013 - 13:38 | 3133327 Hyde_The_Id
Hyde_The_Id's picture

Yes, thank you.  It has taken some time to choose a character.

Tue, 01/08/2013 - 13:47 | 3133371 ParkAveFlasher
ParkAveFlasher's picture

You have chosen ... poorly.

Tue, 01/08/2013 - 14:26 | 3133493 fuu
fuu's picture

Whatever MynMaxGullyFromm.

Tue, 01/08/2013 - 14:54 | 3133632 Arrowflinger
Arrowflinger's picture

Perhaps he was tanning his Hyde with Boner

Tue, 01/08/2013 - 13:06 | 3133180 Dr. Engali
Dr. Engali's picture

Let me know when they start taking delivery, then we will have a story.

Tue, 01/08/2013 - 13:17 | 3133236 fonzannoon
fonzannoon's picture

I read yesterday that my old school district was trying to levy a 9.5% on residents or they would have to shut my high school down because of budget problems. So I went to the budget meeting last night. The place was absolutely packed. The first slide they put up showed that 80% of the 2013 budget was going to pay for pensions and benefits of retired employees. 80%!!! I knew things were bad but the math and the demographics by me would make Kyle Bass blush.

Tue, 01/08/2013 - 13:19 | 3133245 Dr. Engali
Dr. Engali's picture

That's unbelievable. How receptive was the audience to that?

Do NOT follow this link or you will be banned from the site!