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If Japan's "Shock And Awe" QE Happened In The US....

Tyler Durden's picture




 
  • This is your QE on Bernanke: $85 billion per month or $1 trillion per year.
  • This is your QE on Japanese monetary drugs: $200 billion per month or $2.4 trillion per year.

Why? Because the just announced "Shock and Awe" expansion of BOJ monetization takes the total monthly gross purchases to a whopping ¥7 trillion per month, or 80x less than Japan's total GDP of $5.9 trillion. Back in the US, the Fed is monetizing "just" $85 billion per month, or 187x less than US GDP of $15.9 trillion. In other words, if one were to pro-rate the latest Japanese monetization effort to the US, one would get a mind-blowing $200 billion per month and $2.4 trillion per year in pro forma QE every month.

Sadly, we have a sinking feeling, this is precisely the plan, with Japan in the role of the proverbial Canary in the Monetarist Coalmine. If Japan can pull this off for a few months, and when the US realizes it has to do much, much more to reflate the tens of trillions in excess debt, the Federal Reserve will be right there, and the column on the left will promptly become the Pro Forma column on the right.

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Thu, 04/04/2013 - 14:31 | 3409118 Shizzmoney
Shizzmoney's picture

CTRL-PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP

Thu, 04/04/2013 - 14:36 | 3409157 Divided States ...
Divided States of America's picture

Well like the video from yesterday on Japan's homeless....they are satisfied with crushing cans for a living then crushing their government for putting them homesless in the first place....thats a great place to start this currency devaluation experiment....of course, North Korean may totally fuck up this plan...if they do, I will have to give it to them....at least some Asians have big balls.

Thu, 04/04/2013 - 14:42 | 3409192 redpill
redpill's picture

In the Mad Max currency road war, someone just hit the nitrous button!

Thu, 04/04/2013 - 14:44 | 3409203 nope-1004
nope-1004's picture

But Lockhart said this morn, the Fed will "curtail" QE?

LOL.  Lies, lies, lies.......  until this pig blows up - which it most definitely will.

 

Thu, 04/04/2013 - 14:47 | 3409209 Cult_of_Reason
Cult_of_Reason's picture

$1.4 trillion in two years (not $2.4 trillion per year)

Thu, 04/04/2013 - 14:47 | 3409219 Stuart
Stuart's picture

lets see with that much money coming into the system, they ought to be able to manipulate gold down to $1400.

 

Thu, 04/04/2013 - 14:49 | 3409228 centerline
centerline's picture

with a half-life of a few days at most.

Thu, 04/04/2013 - 16:15 | 3409587 Beam Me Up Scotty
Beam Me Up Scotty's picture

All they have to do is press the Zero key once, and one trillion becomes 10 trillion.

Thu, 04/04/2013 - 16:24 | 3409630 Hobbleknee
Hobbleknee's picture

I'm giving her all she's got captain!

Thu, 04/04/2013 - 15:01 | 3409249 Cult_of_Reason
Cult_of_Reason's picture

Doubling of the monetary base to 270 trillion yen by the end of 2014, is equivalent to $1.4 trillion over two years or $700 billion per year (not $2.4 trillion per year). 

Overall amount of money created is important (global economy), not hypothetical "if Japan were USA" Kyle Bass nonsense (and I respect Kyle, but his analogy was misleading).

 

Thu, 04/04/2013 - 15:02 | 3409291 resurger
resurger's picture

I think they fried Kyle Bass ... btw there was a post i read last month or so that he was betting big...

The Jooz win again.

Thu, 04/04/2013 - 15:03 | 3409306 Shizzmoney
Shizzmoney's picture

There should be a sign that says, "Hedge Fund managers are stupider than they appear"

Thu, 04/04/2013 - 16:58 | 3409761 silverserfer
silverserfer's picture

paper gold QE is off the hizook

Thu, 04/04/2013 - 14:53 | 3409244 MsCreant
MsCreant's picture

I get 2,040,000,000,000 over two years, unless I misunderstood.

85 x 24 = 2,040 billion

Thu, 04/04/2013 - 15:00 | 3409289 Citxmech
Citxmech's picture

$200B x 12m = $2.4t  How are you getting $1.4t?

Thu, 04/04/2013 - 15:08 | 3409336 Cult_of_Reason
Cult_of_Reason's picture

$200 billion is a lie (the actual number is closer to ~$60 billion).

Thu, 04/04/2013 - 15:31 | 3409428 redguard
redguard's picture

I think z'hdge is showing what it would be if done to the same proportion here in the states.

Thu, 04/04/2013 - 16:15 | 3409578 Citxmech
Citxmech's picture

See the first bullet points above:

"This is your QE on Bernanke: $85 billion per month or $1 trillion per year.
This is your QE on Japanese monetary drugs: $200 billion per month or $2.4 trillion per year."

Thu, 04/04/2013 - 16:37 | 3409689 Nick Jihad
Nick Jihad's picture

Key phrase, which you'd miss if you only read the bold text: "if one were to pro-rate the latest Japanese monetization effort to the US".

Thu, 04/04/2013 - 19:19 | 3410280 Cult_of_Reason
Cult_of_Reason's picture

Kuroda targets the monetary base; therefore, you need to consider the amount of cash he pumps out to the economy, ~$60 billion, (not the misleading $200 billion relative to the size of the economy scope used by Bass/ZH).

 


Keep in mind, Nikkei 225 is already up by ~40% front running this announcement (most of this $60B announced last night is priced in, so the CNBC bulls, and for some reason [most likely because they hold underperforming gold positions] Kyle/ZH, spin it as $200B a month program).

Thu, 04/04/2013 - 19:28 | 3410290 Overfed
Overfed's picture

They're illustrating a ratio, dumbass. 7T Yen = $72.8 billion. When compared to the size of their GDP, which about one third of the US, the ratio would be like the US printing $200 billion. More like $218 billion, but whatever.

Paul Krugman and Chuckie the Psycho Doll Schumer say "get to work Ben!".

Fri, 04/05/2013 - 00:11 | 3410719 Cult_of_Reason
Cult_of_Reason's picture

Unfortunately, a dumbass is you (or at least pretending to be one).

The goal is to double the monetary base (not the economy); therefore, you need to compare apples to apples or monetary base doubling in the US vs monetary base doubling in Japan.

Japan has already done more QEs than the US, and its monetary base is larger relative to its economy than the US. Japan needs to print more relative to its economy size to have the same effect as Bernanke's $85B.

Each subsequent QE is less effective unless you increase the amount printed (two years from now, Japan will need to print $120B a month to have the same effect as current $60B).

 


In short, using $200 billion analogy without any reference to the monetary base is inaccurate and misleading.

Thu, 04/04/2013 - 14:59 | 3409265 Shizzmoney
Shizzmoney's picture

The Fed is like P.Diddy: "Can't Stop.  Won't Stop" the QE.

Because they need to print cash not just for the govt to fund it (over bloated) business.......but the CIA, TBTF banks, the Pentagon, and the other pigs at the troft have their hands out waiting for their daily cut (which they've been receiving for the past 12 years).

"The Market" also needs QE - because without it, the DJIA and S&P make no where near the gains it does.  The minute a Federal Reserve head even MENTIONS of stopping QE....there is an immediate selloff.  I guarantee this is algo-driven (and the muppets follow).

That's where the outrage should be on QE: none of this money is reaching the people.  At all.  It's all going to hedge/subsidize speculation on housing markets and stock prices.

Thu, 04/04/2013 - 15:23 | 3409397 WTF_247
WTF_247's picture

That is exactly right.

Think about this - in the US if the govt just handed out 85Bil per month rather than prop up the bullshit, any of the following could be accomplished:

 

400k + homes @ 200k each fully paid for, handed out

4.25 mil people "employed" @ 4k per month salary

Every college student in the US goes for free.

Every single person in the US gets $200+ per month for food

Every family in the US gets free health insurance - no premiums

Purchase 4 million cars @ 20k each per month, hand them out

Reduce tax rates for 80% of the population by 50%

 

Think about ANY of the above and US GDP - it would rocket the GDP as people would have 85Bil more per month to spend of their own money.

 

The US citizens need to wake up.  This is our money and its being squandered.  Anyone who beleives these clowns can "unwind" the positions are fools - impossible.  The money all goes to the large banks as free money and designed to prop up the bad bets of all the idiots.

 

Thu, 04/04/2013 - 15:47 | 3409497 TPTB_r_TBTF
TPTB_r_TBTF's picture

.

 

This is our money

 

That's not your money!  Did you create it?  You need to review creator-ownership law.

Money which the Fed creates belongs to the Fed shareholders, not to any sheeple.

Thu, 04/04/2013 - 15:13 | 3409350 Atlantis Consigliore
Atlantis Consigliore's picture

DEVALUATION;  its a currency devaluation in Japan,   US next... asset controls....   gold confiscation, etc. and the THE VAT TAX.  

do it for....The Children

Thu, 04/04/2013 - 14:49 | 3409223 centerline
centerline's picture

Fuck yeah!  Japan steps up to the plate and knocks it out of the park.  Got to keep this game interesting.  Currency wars about to go thunderdome-style.

Thu, 04/04/2013 - 14:51 | 3409237 resurger
resurger's picture

I thought nitro printing was for backwardationations.

 

Thu, 04/04/2013 - 16:20 | 3409620 aerojet
aerojet's picture

A nation whose culture doesn't allow dissent and nobody is armed.  The very definition of lemmings.

Thu, 04/04/2013 - 22:00 | 3410720 Buck Johnson
Buck Johnson's picture

When Japan goes, so will the US and the West.  And if you haven't noticed the inflation in Japan is out there and it's from the QE Japan is doing.  The difference with the US is that Japan is a nation of savers and the US is a nation of spenders and credit users. 

Thu, 04/04/2013 - 14:35 | 3409160 McMolotov
McMolotov's picture

Bernanke is Zuul, and there is no economy — only Zuul.

Thu, 04/04/2013 - 14:46 | 3409212 redpill
redpill's picture

I think Japan just crossed the streams.

Thu, 04/04/2013 - 15:00 | 3409287 Dr. Venkman
Dr. Venkman's picture

If someone asks if you are a god -- you say YES

Thu, 04/04/2013 - 14:51 | 3409231 prains
prains's picture

Holy Fuk....ishima

and to think the 150 mile wide toxic dump floating towards canada's shores was bad.....

 

we...are....crater...ing

Thu, 04/04/2013 - 18:09 | 3410061 dark_star
dark_star's picture

Ben, WTF.  You need to press P each time yeah, CTRL P then tap, tap, tap.  Repeat.

Thu, 04/04/2013 - 14:31 | 3409125 kaiserhoff
kaiserhoff's picture

Not IF,  When!

Thu, 04/04/2013 - 14:58 | 3409272 Winston Churchill
Winston Churchill's picture

Beat me to it.

This is a one way street with no turns off.

Wile E Coyote's cliff at its end.

Thu, 04/04/2013 - 14:31 | 3409126 Major Major Major
Major Major Major's picture

Moar Billions

Thu, 04/04/2013 - 14:35 | 3409153 Vashta Nerada
Vashta Nerada's picture

Krugman is going to print out that chart, and masturbate to it.

Thu, 04/04/2013 - 15:32 | 3409426 ParkAveFlasher
ParkAveFlasher's picture

It will be him lying down (with some liberal Photoshopping of the vertical part). 

It's playing right now on the WB7 channel in my brain.

 

Thu, 04/04/2013 - 14:31 | 3409129 Schmuck Raker
Schmuck Raker's picture

Bernanke, you lazy little grub, get to work!

Thu, 04/04/2013 - 15:03 | 3409299 Winston Churchill
Winston Churchill's picture

Dr. Bernankenstein to you.

He has created an uncontollable monetary monster.

Long pitchforks ,and torches.

Thu, 04/04/2013 - 14:31 | 3409131 venturen
venturen's picture

We can do better...lets print $500 billion a month! The world has lost it mind.

Thu, 04/04/2013 - 14:55 | 3409253 Bastiat
Bastiat's picture

I just type 1 then held my zero key for 3 seconds:  1 X 10^80

These guys are pikers!

Thu, 04/04/2013 - 15:07 | 3409317 css1971
css1971's picture

Sometimes you need a pro for work of the scale they're looking at.

print "1"

while true

do

print "0"

done
Thu, 04/04/2013 - 23:16 | 3409552 whirling tword ...
whirling tword freedom's picture

 

 

 

# prog bernak_a_spank.exe

# All rights reserved 

# Main()  While true and not pitchforks

while (1 && ! $pitchforks ) {

   print "Bend over and spread em.... " ;

   if ($success = exec_ctrl_p(200,000,000,000)) {

      print "Yeah Bitchez,  who's yo daddy!!!!!!" ; 

   } 

   # are the crowds coming yet  ( check every federal reserve!!!! )

   foreach $reserve (%Fed_Reserve_hash) {

      if ($pitchforks = check_for_angry_mobs($Fed_Reserve_hash{$reserve})) {

         # shit, we found angry mobs...

         # $pitchforks is true and exit %Fed_Reserve_hash loop

         last ;

      }

   }

   # Are they mad enough yet?  ( is pitchforks true? )

   if ($pitchforks) {

      # Yep, they're pissed.  Get the money

      # Execute for evey account in bank hash.

      foreach $bank ( %bank_accounts ) {

         foreach $account (%{ $bank_accounts{$bank}}) {

            if ($success = exec_Corzine_manuver($bank,$account))

               print "MY MONEY, Bitchez!!!!!!"  ;

               if ( $success = withdraw_cash($bank,$account)) {

                  print "MOU-HAHAHAHAHAHAHAHAHAHAHHAH, BITCHEZ"  ;

                  print "I have all of ${bank_accounts{$bank}{$account}{USER}}'s money!!!!!!!" ;

                  close_account($bank,$account) ;

               }

            }

         }

      }

      # Ok, I have all the money now... time to go.

      exec_call_the_jet_to_GTFO_of_dodge() ;

      exec_taunting_with_much_joy() ;

      # pitchforks = true so exit.

   }  # End if $pitchforks... If no pitchforks... CTRL_P!!!!!!!!!!!  Loop again!!!!!

}

Thu, 04/04/2013 - 14:59 | 3409276 resurger
resurger's picture

I raise :

$700bn

Thu, 04/04/2013 - 14:33 | 3409135 onewayticket2
onewayticket2's picture

mind boggling.  sorry kids. 

Thu, 04/04/2013 - 14:33 | 3409136 Dr. Richard Head
Dr. Richard Head's picture

"I learned it by watching you, Japan.  I learned it by watching you."  Ben Bernanke

Thu, 04/04/2013 - 14:33 | 3409137 kaiten
kaiten's picture

Wonder when will ECB join the printing orgy.

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