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Kyle Bass: "Japanese Retirees Will Lose Up To Half Of Their Life Savings"
While Kyle Bass notably remarks that pinpointing the end of a 70-year debt super-cycle is naive, the combination of the resurgence of nationalism (impacting trade with China) and the dreadful impact of the earthquake/tsunami (drastically changing Japan's supply chain) has secularly shifted Japan's trade balance for the worst at a time when the current account is already negative. "They are all in denial," Bass notes as the government has failed to deal with its problems over the last 20 years.
Simply put, Japan needs a Schumpeterian 'creative destruction' moment instead of the constant rolling of debts and expanding of government balance sheets to paper over the cracks. The 'moment' feels like it is now, he notes, expanding that "JPY could hit 200," as they lose control; following two decades of volatility-smoothing, the chance of a disorderly collapse are high.
Critically, he fears, "the social fabric of Japan will tear," as with one-third of the nations at retirement age, the fallout from the policies of Abe-Kuroda could cause them to "lose 30-50% of their life savings." What is perhaps even more concerning, he adds, "you are starting to see the central banks not trust each other."
At a certain point in time, "nationalist interest takes over the global [G7] kumbaya," and that is occurring now.
"When your debts are 24-times your government tax revenue, you have a secular decline in population, and all of the things are finally catching up to you, what happens when you have a debt crisis?"
Central Banks believe "Devaluation is 'supposedly' the way to freedom"
3:00 - Japan's tearing social fabric
4:30 - G7 Kumbaya unwind
6:00 - "There is no way out" for Japan - it's a matter of when not if. And "if there is no way out for them, there is no way out for the rest of us - unless we change the way we operate."
6:30 - "If there is no consequence to the US profligacy [rates not moving against them] well then they will keep spending." - "Central banks are enabling the spending"
7:15 - "The Modus Operandi of the west is running deficits; and what that has meant in the past is runaway cost-push inflation - and I think that is what we are going to see"
8:00 - "Investors are too complacent" - this is the single-most riskiest time to be complacent in our generation - "investing with the typical endowment model... is not going to work"
9:00 - "The insidious nature of a runaway inflation is that it bankrupts the middle class... the poor stay poor, the middle class (with savings in the banks) get wiped out, the wealthy (with productive assets) do the best"
9:40 - ... which leads to social unrest globally - and that is a problem...
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the dollar loses much more than japan and the yen loses. frankly, old people die. the japanese have a very stoic attitude about death. only in japan will you hear a conversation, as i did, with my fathers' generation joking with each other about who was going to be next at my grandmother's 1 year memorial ceremony of her death. she was the last of her generation. the japanese are actually better positioned than the west BECAUSE their population is skewed to the elderly. the family unit is still largely intact which assures the care of the elderly but the elderly will not hang onto life if the family is burdened. it is a mindset totally misunderstood by the west. taken another step further, japanese society is socialistic by culture. the nation comes first. they will do what is right for the nation first. next comes the employer then the community, then the family and lastly the individual.so who cares if the population loses 50% of their savings. they will pool waht is left of the wealth of the nation and rebuild it.
on a techncal note, kyle(nor many other people)doesn't seem to understand the structure of the boj and japanese debt. japan has a greenback mechanism(quadrillion dollar coin) built into the system that would allow the default on much of it's debt without a complicated web of internal counter party risk. the risk is almost all external. that is the atomic bomb. if things get too out of hand they will drop it on the world, effectively blowing up the world before it blows them up.
korea, as japan's main trade rival, is in trouble, too. because japan bombed pearl harbor korea has no choice but to join them because they really can't fight them. the ironic solution to their problem is to reunify with the hermit kingdom and go back to slave wages....which won't happen because the usa says it will not happen. that is the real flashpoint for war between the usa and china. the people of japan won't riot if .gov raises the rising sun flag(battle flag) to rally the people(isn't that what is happening now?). the korean people, on the other hand, will riot like kimchi in your lower bowels at the first sign of .gov induced inflation.
in the meantime, the dollar will rally like it was gold until the usa economy collapses in the wake of a euro collapse eventually buried in a weimar flood of dollars printed to offset it's strength, abandoned by the brics in a last one out loses competition. the walmart model fails in a pile of burned dollars used to heat the house.
Well, thanks for posting.
So other than that, how was the play Mrs. Lincoln?
Occam Razor
The end of interest bearing money is coming. MMT will replace global government borrowing from the rich and bankers and paying them interest as opposed to collecting taxes from them. Governments will print their own money in sufficient quantiles and collect sufficient amounts in taxes. People like Bass are not paying attention.
The Japanese government will one day announce YEAR ZERO--all debts will be declared null and void. This is nothing new, all obligations are paid from current receipts anyway: government spends money first and then worries about funding. This is exactly the same way banks lend money: they make loans first and then worry about reserves later.
I am wondering here. If the government prints a sufficient amount of money on its own, which I think is much better than the current system, why it even needs to collect taxes?
Cause they need to give jobs to all those people in the IRS of course!
Like it will be different here.
Dp
If you agree with kyle, how does one play it?
1. Sell yen
2. Sell Japanese bonds
3. Puts/options How?
4. ?
5. ?
Sell Nikkei
Sell Nike
Just fuckin' sell!
Why, you BTFD, of course.
Puts on FXY working for me. double since wedsday/thursday inception
The entire globe, with few exceptions, has severe debt problems and the only effective solution anyone has implemented was in Iceland. How much theft will the rest of the world tolerate before we say fuck you to the creditors who've foisted all of the odious debt onto helpless populations?
I have wanted for several months to compare the Bill of Rights to what is really going on in America
I knew it was bad, but this makes it clear how bad. Here is the summary, and in the below links are the full texts of the amendments and the supporting information on how the amendments are being raped.
Summary of the Bill of Rights (Amendments 1 through 10)
Amendment 1, Freedom of Speech, Raped
Amendment 2, Guns, In process of Being Raped
Amendment 3, Soldiers in Houses, Not applicable
Amendment 4, Unreasonable Search and Seizure, Raped
Amendment 5, Without Due Process of Law, Raped and Droned
Amendment 6, Criminal Prosecutions, Raped
Amendment 7, Right to Jury Trial, Raped
Amendment 8, Cruel and Unusual Punishment, Raped and Tortured
Amendment 9, You have all the rights that aren’t mentioned, No Data
Amendment 10, State Hold all Power Except that Specifically Granted to Feds, Raped
The full text of the Amendments and the rational basis for the judgement above are located here, please check it out and pass it on. What does it take to wake up the sheeple.
http://nukeprofessional.blogspot.com/2013/04/bill-of-rights-summary-of-c...
Work form home.
Ride a Bike.
Grow A Garden.
Keep Stacking.
You're Welcome.
I can just imagine it, as Francis writes from FEMA camp:
"Dear Simon, I take back everything bad I said about you. Please get me out, and let me join your community of affluent expats. Will pay with Bitcoin."
/s
OT but worth the minute.
http://www.youtube.com/watch?v=_Jmisv1Spck
Nebraska spring game.
but the nikkei is up nearly 3 percent intraday so far, and it surged past 13,000 at open, and we all know the stock market is a great indicator these days of how well and economy is doing, so japan must be in great shape, lol.
i cant say i wont enjoy when japan goes to shit. they have no one to blame but themselves, same can be said for the u.s.a and all other printing press countries.
why does everyone always say "when"? If Japan has not gone to shit yet I don't want to know when it does. It is spewing radiation all over itself. It's a bunch of old people. The young people are suicidal "herbivores". It's a total disaster already.
how about the one-two punch...bring on peter schiff!...
I can handle it
Can you? Really? How about an 18' clip of Peter Schiff at Simon Black's farm in Chile?
Did your head just explode, or was it Francis's head that just blew up?
;-)
Have a lot of respect for KB but when you start talking about "years away" scenarios, it serves no real purpose for "hear and now" which is what the world is TODAY!
You don't need the middle class in a slave and slave owner relationship.
I do have to respect someone who knows how to use "kumbaya"
We've reached the point in this world where technology will enable us a store of wealth outside the purview of government. Whether Bitcoin is the ultimate winner remains to be seen, but the people of Japan will have a lot more in common with the people of Cyprus in the next few years than they can possibly imagine now.
http://www.vegasxau.blogspot.com
Central Banks are winning the recent battles, and this has emboldened them. Draghi jawbones the euro simply by saying "whatever it takes", even if he doesn't know himself what whatever means. The euro and peripheral sovereign debt markets salute his mere words. Upon his election, Abe jawbones the yen down. Then another soon-to-be-former Japanese official simply says, "Too far, too fast" and the yen rallies three percent. Abe speaks again and the yen falls back, followed by yet another official who says the yen adjustment has been enough, leading to a yen rise. Whiplash. C-bankers, at least in this short term, see they have the whee in their hands, and can toy with markets as they wish.
Based on this recent success, plus what Bernanke has achieved in the Dow, C-Bankers feel their oats and begin to believe their own hype. They see they can get the congregation to stand, sit or kneel on command.
When, and only when the market begins to doubt their omnipotence will this all fall apart. The doubts come when hubris even exceeds the faith of fanatics.
This C-Banker hubris is best exemplified in Japan's SeppuKU-E and Harakiri-nomics. For those familiar with the language and Kanji, this gets out of hand when the market realizes and accepts that this is not ? ? Kamikaze (Divine Wind), but rather ? ? Kamikaze (Paper Wind). When it comes it will be the Attack of the Origami Black Swans.
.
I posted this in another thread, but .... Isn't it dangerous to assume the BOJ will actually do all the things they said they would? Doubling the monetary base in two years seems too outrageous considering their stated main goal is achieving a 2% price inflation in two years. Isn't it possible they actually plan to scale down their QE once the target is met, and this is all just for shock & awe?
Last week they pulled the trigger and blew up their bond market in a matter of hours. If its so bad (the monster behind the curtains) that they feel forced to monetize their bond market at $81 billion per month, you now have the outlines of the monster they are trying to fight off.
financial godzilla attacking tokyo?
where's ultraman when you need him.
B3M and the Next Revolution: How Central Bankers and Economists will cause political chaos
A rant on the unnatural use of power by central bankers.
These are the men who matter: Ben Bernanke of the US Federal Reserve, Mario Draghi of the European Central Bank, Mervyn King of the Bank of England and Mark Carney, currently the outgoing Governor of the Bank of Canada and the incoming Governor of the Bank of England.
Collectively they are B3M (Ben, Merv, Mario and Mark)
The B3M central bankers have taken effective control of the economy as well as the financial and political system. This is both unnatural and unsustainable.
We are told that we must trust, for they are wise men who have studied in the hallowed halls of the great academies. They are our betters – and as such we must listen, obey and follow.
However, the bankers should serve the economy and the economy should serve the polity.
Instead, the polity is used as a source of revenue to serve the economy which is now controlled by the bankers. Natural market economics will not tolerate an inversion forever.
They have studied in the great halls of the academies. They have stood on the docks of Amsterdam as the tulip bubble popped and they saw the heads role off French revolutionary guillotines as the assignant currency failed. They were there in 1866 when the Bank of England’s Governor stepped into the breach and they lived through the great depressions of the 1870s and the 1930s. To them, the Shadow Chancellor is not a modern day Labour Party politician but rather the man that gave us Bagehot’s dictum.
I am not B3M. I don’t have a PhD in economics from Harvard or Princeton. I am not a quant. And no, I don’t have a Masters Degree in Economics. I did work in the financial sector and I do understand a thing or two about risk.
Rant continues at: http://tinyurl.com/cwu5ucu
from wires:
North Korea seen readying for fourth nuclear test-report
Japan's defence forces ordered to shoot down any N.Korea missile-Kyodo
http://www.japantoday.com/category/national/view/sdf-ordered-to-shoot-do...
China's false flag.
.
Is the salmon from Alaska now 'infected' also with radiation?These were one of the few remaining fish 'safe' to eat before Fuki.
Thank you Japan.
Thank you GE.
What does this Kyle know about anything?
Bernank on the other hand is a student of the great depression, so I will gladly put all my trust in him (knowing that all he does, he does for the common man).
Save us great bankers....we need you more than ever now!!!
Palladium: Great Technicals and Great Fundamentals
I have done a lot of posts lately on Palladium. Use the search box to get the whole story.
Check out the high volume hammer which amazingly hits the black downtrend line and the 25% Bernoulli uptrend line, almost perfectly. Note the volume below, pretty high. Now look at the next chart, which shows the derivation of the Bernoulli Downtrend Line.
This is called a back test.
So you have
Back Test
High Volume
Hammer or Doji
Egg Bounce
http://oahutrading.blogspot.com/2013/04/palladium-great-technicals-and-g...
he who has the most guns wins.
and with so many youths unemployed the rich man with the largest army wins.
sound familiar?
Sounds 'american'.
Ah, one of those 'american' geniuses.
Losing half life savings, what does it mean?
'American' economics is all about consumption and debt is a crucial factor in it.
The consumption of the environment is finite.
Thanks to debt, 'americans' residing in Japan have consumed much more than they could have without debt.
'American' Japanese will wake up seeing that in a world put on the path of depletion of resources by 'americans', they've made up for a large share of the consumption.
In this context, it is much better to have consumed heavily and be drowned into debt to wake up and see that more consumption is not possible rather than having consumed lighted, with small debt, and wake up and see that more consumption is not possible.
Of course, it is part of the 'american' genius'job to try to cover for this reality and paint 'american' as victims.
It is an 'american' world and the future will be 'american'.
It will be much better to inherit from big thieves, largely indebted (so 'americans') rather than from honest people lighted indebted.
That is the way it is and that is the way 'americanism' works.
But as victimhood is high among 'americans', they have to be the victims.
It cant be otherwise.
And they pay lavishly 'american' thinkers to reinforce them in that perception.
The 'american' middle class is the King class.
AnAnonymous said:
Propaganda has grown extremelly sad as propagandists no longer waste time on thinking of good, credible propaganda. And renewed. More than anything, renewed.
the plan is...................there IS no plan.
they are just extending n pretending as long as they can.