“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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
fonzannoon's picture

The 15% of the audience that was ballistic about it were told to shut up and that they "were the least educated people involved" for questioning the possibility of cuts to benefits.

The options on the table were to levy the tax or close several schools. That really accomplished nothing because the remaining teachers/administers etc. would not have lost their jobs. They would have just been transferre.

The audience was too concerned with yelling at each other over which schools should be closed. That seems to be the way they are leaning. The superintendant had cue cards from the crowd he was supposed to read. He started skipping over several of them and everyone started screaming that he was cherry picking the questions.

Long story short it went about as expected.

onewayticket2's picture

similar story all over (unless you and i live in the same, dysfunctional town!).  it's sad....but the beatdown of the 15% informed should convince you that we're beyond the tipping point....


as a newbie here, help me understand how to play this slow boiling away of liberties and wealth....physical gold, guns and LT food storage?  what if, like diamonds, general, err,  government electric can make "gold" in a lab??

fonzannoon's picture

my russian mother in law keeps telling me we need a dacha. i think she is probably right.

SAT 800's picture

I would go with the russian mother in law; and don't forget the Mosin-Nagants and the canned ammo. They are extremely good at this shit. Remember, there the ones who told the Nazi Panzer Armys, oh, fuck you you're not so tough.

durablefaith's picture

Its the question really.

There are several options:

1) Go along to get along. Turn in your guns, gold, and your neighbors and get a job wearing government supplied boots. The DHS, FEMA, and TSA are still hiring.

2) Prepare to join the resistance. Buy domestic farmland, dig a hole for storing hub caps and fishing rods and other things to get the attention of metal detectors, and get to know your neighbors. Store food and ammo and prepare for the day when the local govt sells out to the feds and they come to "regulate" you into a city or a fema camp.

3) Go with your plan A, one way ticket to somewhere not on the immediate chopping block: simon black style.

With all three options, the survival rate eventually drops to zero. So my advice is look yourself in the mirror and make a decision you wont be ashamed of in eternity.

Panafrican Funktron Robot's picture

Land outside of cities and liquor are other good things to consider.  Liquor is easily tradeable and has an understood value by virtually everyone, and has medicinal properties as well (antiseptic, sedative).  It's also pretty easy to get a fire going with a small liquor pour.  

trav777's picture

they can already make gold in a lab.  Nuclear transmutation makes gold all the time.

auric1234's picture

You can't manufacture gold. Diamonds are carbon-based (like you and I, but with a different structure). Gold is a chemical element (pure substance) and comes from the stars (supernova).


hoos bin pharteen's picture

You could probably pull it off in a particle accelerator, but the cost / oz would be astronomical.

Freddie's picture

Union extortion. 

The administrators and union management needs to be tarred and feathered.

SAT 800's picture

Wow. that;s amazing. So, that's what it looks like at ground Zero; ehh? out there in the "real" world. Nobody can grasp that all these freeloaders are going to have to be thrown out of the lifeboat and live on Social Security. Reality is so hard. "Socialism is fine, until you run out of other peoples money to spend"--Margaret Thatcher.

Top_Kill's picture

So the people in line for the massive retirement packages choose to fire the  other current teachers so that they can maintain their ridiculously huge retirement packages...SELF PRESERVATION BITCHEZ.

Only 20% left until they turn on each other. Get your popcorn!

NotApplicable's picture

They are all public school graduates, so what do you think?


They drooled, flung poo.

LongBalls's picture

The doctor has issued his order. Taking delivery is what it is all about. More stories on delivery please. Until then its shoots and ladders.

Ace Ventura's picture

Bingo! As long as this is all a paper-based series of 'transactions', the bankstahs still win. It sure would be nice to know when the scam will no longer be sustainable by mere computer entries. Somewhere, somehow, a physical transaction will have to occur (even if it's to shuttle more metal to one of the Rothschild's vaults) of sufficient size, that will be the first publicly recognized domino?

Then again, they seem to be managing quite well so far.

DoChenRollingBearing's picture

And if just 10% or so of us physical gold owners DECLINE to sell (esp. central banks), game over.  $55,000.

LawsofPhysics's picture

Hhmm, does it matter if no one is willing to sell Japan the commodities they need to survive?

LawsofPhysics's picture

Gee, glad to see someone gets it.  Same as it ever was as the outcome will be no different this time around.

Ghordius's picture

ehm... N/A
Their asset's in the US were frozen and pre-WW2 Japan was being embargoed for metals and oil - by the US

Today's Japan exports plenty - when you have something to trade...

forwardho's picture

Indeed sir,With what perchance do they have to buy said commodities?

Their currency seems a bit risky to hold, what.

BigInJapan's picture

In all the yearning for a weak Yen, not a single idiot on tv over here has once mentioned that every tick down in the Yen means higher prices for EVERYTHING in a country void of natural resources. Imported or domestically produced, it all has input costs priced in $.

A fact so glaringly obvious and so obviously ignored by Japanese media that it leads me to believe that the fix is now in with an unstoppable move toward an Asian monetary union of sorts.

kensdad's picture

Good.  We need a massive buyer of paper gold to offset the sellers of paper.  The Japanese would make the perfect foil.

China can buy the physical stuff while Japan buys the paper.

The sellers in the West will get a golden enema.

Top_Kill's picture

WRONG! More flow gives more dry powder to short.

americanspirit's picture

Pension funds are in deep trouble worldwide. It's only a matter of time before at least some of them realize that putting a significant portion of their assets into physical gold could kick off a gold rush that would enable them to recover from their losses of the past few years. Then when the price of their gold assets had increased by 500-1000% they could sell into the frenzy that had created and sit back and watch the fun from the sidelines.

fonzannoon's picture

Americanspirit I meant to put my post by you and put it above by accident. Pensions can have all their problems solved through your property taxes. Right up until they can't.


MillionDollarBoner_'s picture

 americanspirit ...Jamie?

Is that you?

Listen to me...go into the Light!

Now reach back into our past when you used to have an open mind, remember that? Just try to use that for the next couple of minutes.

There is no death. It is only a transition to a different sphere of SIFI.

Ignore Lloyd... He lies to you. He tells you things only a bankster can understand. He has been using you to restrain the gold price. To you, Lloyd is simply is another bankster. To us, he is The Beast.

(Nods to Poltergeist - 1982)

NotApplicable's picture

What's funny is that when I tell people that their pension is worthless, I always get the reply, "Oh, ours is okay, its funded at X%, which is much better than the [local police/fire/teachers pension] which is only funded at Y%" (where X > Y).

I then point out that both pension plans used to have a much higher number, and that all of them are approaching zero, just at different rates depending upon the insanity of the math involved (usually union dependent).

Then it's a quick mental trip into our future of living in ZIRP World to see that there is means of getting ahead, other than tangible assets.

Arrowflinger's picture

They usually tell me that theirs is in a "stable value" fund. I point out that stable value funds owned a boatload of MBS, CDO's, CLO's and CDS worth 25 cents on the dollar. Congress forced FASB 157 on the accountants so that the funds can LIE that those things are still at stated value.

trav777's picture

ZIRP is a symptom, not a cause.

You need to understand how yield gets paid and what could cause yield not to be able to be paid.


hidingfromhelis's picture

He who panics first, panics best.

epwpixieq-1's picture

It may as well be, but there is a fundamental assumption that the pension funds DO CARE about wealth preservation to wealth extraction, and that the pension fund managers DO CARE about long term view ( 5 -10 years), when they will be long gone from the fund management compared to the 1-3 years time line an their CURRENT salary/pay-check/bonus  AND NOT DISTURBING the system and the powers that rule.

This is probably true for the pension funds from a group of Countries like: Russia, Brazil and Chile. Countries that are comparatively wealthy and have a lot to gain from changing the current financial order.


905ozs's picture

Japan was bought & sold in 1946.

More chance of a pink elephant flying, landing & my (gorgeous girlfriend) accepting anal penetration from it...whilst sober :)

ZH/Tyler, u know rothschild Inc run the system, why you posting non-realistic crap?

MillionDollarBoner_'s picture

And if just 0.00001% of Japanese Pension Assets shifted into my bank account, my prospects would explode :O)

'Bout as much chance of happening, 'tho...;o(


(Disclosure: long all PMs, incl. Au, Ag, Pt, Pb...)

youngman's picture

I think they are buying now...you would not want to telegraph it though....and I don´t think they will store it in some New York Or London vault....all I hear are buyers.....who is selling....???

Inthemix96's picture

A friend I have runs a warehouse business for a major high street brand and took on a Japanese fella last week.

He was put in charge of looking after supplies.  He told me after his first day at work, for eight hours no-one had seen hide-nor-hair of him.  So my mate was not in the least happy as you can imagine, so he went looking for him, after going down one of the massive isles of products the Japanize bloke jumps out half way down and shouts,


I think he sacked him??  Fuck knows what for?

forwardho's picture

Oh, very well done Bruce,

Very well done.

Inthemix96's picture

Sorry, its my imature and irresponsible side coming out.  Just like the politicians and wankers.. sorry bankers that make me like this.......


Thisson's picture

That was really funny, Inthemix96!!!  Thanks for posting that - haha!

Inthemix96's picture

Thanks Thisson, but thats nowt.

A friend of my wifes partners husband who makes $86 an hour had walked into her home and found out that her husband had been having an affair.  She waited till he was asleep that night and snuck upstairs and cut his cock off.

Now when she got in the car and was flying down the motorway she didnt know what the hell she was going to do with the severed cock so chucked it out the window.

Now Paddy and Mick the two Irish fellows were going along in their van when the cock hit their windscreen.

Quck as a flash, Paddy says to Mick, "Bejesus son, you see the size 'o' that cock on that fly?"


Inthemix96's picture

Cheers mate, in these times of universal hardship why not try and lighten the load?

Good folk will prevail friend, and if you lose your heart and your laughter what the fuck is left to fight for?  You have to laugh mate, if you didnt you would cry.  I try my best to keep peoples chin up, and the best way I have always found is making them smile.

We aint all blood sucking parasites, some of us are just us.  People.  Keep on keeping on friend, we will find a way.


zerotohero's picture

been sic with flu for 2 days - i needed that _ thanks

Inthemix96's picture

Anytime friend, anytime.

Chin up, eyes wide, we aint done yet.  And a happy new year to all you bitchez.

PaperBear's picture

Moreover if 0.1% went into silver, the silver market would explode.

trav777's picture

...the plaintive wail of the silverbug

akak's picture

... the moronic and completely disingenuous wail of the bond-buying bagholder.