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Sustainable?

Tyler Durden's picture




 

It is all too easy to look admiringly at levitating nominal stock prices, stick your head in the sand, and believe that Abe and Kuroda have it all under control (by "it" we mean everything that has happened and that Zero Hedge predicted would happen two years ago). But for those unwilling to take the BoJ's word for it that "the economy has stopped deteriorating," we ask one simple question. After looking at the following four charts of Abe's 2-2-2-2 Plan, "is it sustainable?" You decide...

 

Abenomics: The "2-2-2-2" policy

+2% inflation in 2 years - by printing (and implicitly devaluing the currency on a scale we have not seen)... way beyond anything anyone has ever tried before...

 

Double monetary base and BOJ’s JGB holding

 

Double the average duration of JGBs the BOJ buys

 

And all this with a Structural deterioration in the extrernal balance...

 

 

All looks very doable eh? Now ask yourselves, do you feel lucky?

Sustainable?

Given the volatility in JGBs on the last 3 days, we suggest not. ..


 

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Tue, 04/09/2013 - 18:59 | 3428802 francis_sawyer
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Even a 'Kardashian' could not possibly backstop what's to come...

Tue, 04/09/2013 - 19:14 | 3428878 WayBehind
WayBehind's picture

Sustainable? Are you kidding me?! I mean, of course! To the moon!

Tue, 04/09/2013 - 19:42 | 3428956 The Alarmist
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Meh! Sustainable seems to have become a question of whether or not the proles are in the streets with torches and guillotines.  Don't see them yet, so things, as reported, must be sustainable, no?

Tue, 04/09/2013 - 19:42 | 3428960 Ahmeexnal
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Seems like a shortage of Depends is about to develop in the land of the rising sun.

Wed, 04/10/2013 - 05:19 | 3430001 mt paul
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stainability ...

 

japan just shot their load

Tue, 04/09/2013 - 19:51 | 3428988 asteroids
asteroids's picture

I bet the FED and the ECB are watching very very carefully. If this experiment works, expect these money printers to go "full retard". I personally don't see how it can with all their debt. Printing money doesn't fix that.

Tue, 04/09/2013 - 21:21 | 3429243 Quantum Nucleonics
Quantum Nucleonics's picture

I personally don't see how it can with all their debt. Printing money doesn't fix that.

 

But isn't that the whole point. Printing inflates away the debt problem.  They are killing two birds with one printing press.  They wipe out their debt with inflation, and smash their currency making their exports competitive.  Sure, their retired population will be eating cat food, or will be cat food.  Wait, that's three birds.  The sooner they get their demographic profile "right-sized", the better.

Tue, 04/09/2013 - 19:21 | 3428895 toys for tits
toys for tits's picture

This is my kind of sticking heads in the sand.

http://i.imgur.com/JC0rTcq.jpg

Tue, 04/09/2013 - 23:45 | 3429656 Rubbish
Rubbish's picture

By George, this is gonna work

Tue, 04/09/2013 - 19:24 | 3428910 prains
prains's picture

Yes goddamnit Japan is unsustainably sustainable......unsustainably

Tue, 04/09/2013 - 19:01 | 3428813 StarTedStackin'
StarTedStackin''s picture

Green shoots, recovery summer hope and change!!!!!!!

Tue, 04/09/2013 - 19:00 | 3428818 nmewn
nmewn's picture

Confetti...weeeee!!!

Tue, 04/09/2013 - 19:03 | 3428821 Dr. Engali
Dr. Engali's picture

Damn I forgot to check my gardens on FarmVille ...I bet everything died and I'll have to start all over. Just fricken great! ........Damn chart porn anyway.

Tue, 04/09/2013 - 19:09 | 3428853 kaiserhoff
kaiserhoff's picture

Can you buy virtual food with bitcoins?

Tue, 04/09/2013 - 19:17 | 3428885 WayBehind
WayBehind's picture

Virtual food & virtual money. What a great combo. We need more of those hahaha

Tue, 04/09/2013 - 19:21 | 3428900 nmewn
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Kinda like EBT in a strip club...it just appears out of the ether...but its still kinda fishy ;-)

Tue, 04/09/2013 - 19:42 | 3428967 The Alarmist
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I kind of got the impression that Bitcoin is ideal for hiring hookers/strippers.

Tue, 04/09/2013 - 21:25 | 3429256 Pareto
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I finally said fuck the garden planting (kept dying) and built an oil refinery and a bunch of rigs.  That was forever ago.  Havent been back since.  A retarded waste of time.  Now i'm here.  Much more productive.

Tue, 04/09/2013 - 19:09 | 3428844 Headbanger
Headbanger's picture

Assets!!??   We don't need no stinking assets!

http://www.youtube.com/watch?v=VqomZQMZQCQ

Great movie. Watch it.

Tue, 04/09/2013 - 19:26 | 3428914 Goldilocks
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You’ve got to ask yourself one question. Do I feel lucky? Well do you punk,,,

Classic Movie Line #31
https://www.youtube.com/watch?v=u0-oinyjsk0 (0:28)

Tue, 04/09/2013 - 20:53 | 3429163 Iocosus
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Speaking of Japs and Clint Eastwood.....

 

https://www.youtube.com/watch?v=LeU-qDbKw68

Tue, 04/09/2013 - 20:53 | 3429164 Iocosus
Iocosus's picture

Speaking of Japs and Clint Eastwood.....

 

https://www.youtube.com/watch?v=LeU-qDbKw68

Tue, 04/09/2013 - 19:52 | 3428995 LeisureSmith
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Note to self: Learn how to dance like an old gold prospector. http://www.youtube.com/watch?v=3w4B7QxL_n4

Tue, 04/09/2013 - 19:08 | 3428845 kaiserhoff
kaiserhoff's picture

What the banksters want is inflation in real estate to bail out their bad loans.

What they get is commodity inflation, which tanks the economy.  They keep repeating the same mistakes. Government debt will crush them all soon enough.

Tue, 04/09/2013 - 19:10 | 3428857 Headbanger
Headbanger's picture

Ding ding ding ding ding!! 

We have a winner!

Tue, 04/09/2013 - 20:15 | 3429066 1000 splendid suns
1000 splendid suns's picture

Billyens and billyens and billyens!

Tue, 04/09/2013 - 19:14 | 3428871 Hedgetard55
Hedgetard55's picture

Jap stocks are free money for anyone who wants it. All their wealth are belong to us. Fuck Mrs Watanabe, she is going to get fucked up the ass big time.

Tue, 04/09/2013 - 19:22 | 3428904 toys for tits
toys for tits's picture

Nothing a little war won't solve.

 

Tue, 04/09/2013 - 19:15 | 3428874 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Abe and Kuroda are breaking (Divine) wind in the general direction of China.

Tue, 04/09/2013 - 19:20 | 3428889 Yen Cross
Yen Cross's picture

     I sounds really bad when we talk about it, but when I see it on paper/monitor I want to shit myself!  BoJ gone full retard...

Tue, 04/09/2013 - 19:26 | 3428919 CDNX fan
CDNX fan's picture

Tyler - you have nuked me three times as a troll - I repeat my statement since 2010:

 

"NEVER underestimate the replacement power of equities (common fucking stocks, ETF's, E/S futures) within an INFLATIONARY FUCKING SPIRAL."

 

What is it about that statement that makes the ZH crowd go bonkers? Martin Zweig said it when Tyler was in Grade School. 

 

FUCK!

Tue, 04/09/2013 - 19:52 | 3428958 razorthin
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You referenced "Martin Zweig".  There's that.  You endorse paper - there's that too.  Lastly, there is no shortage of geniuses, like your buddy Marty,  when the "market" is ascending.  A very small fraction of those geniuses avoid being wiped out with the next market wipe-out.

Shark bait.

Tue, 04/09/2013 - 20:32 | 3429107 adr
adr's picture

SO I buy Chipotle, Netflix, and Amazon and become a trillionaire?

There were a lot of trillionaires in Zimbabwe. I bet a lot of people in Wiemar felt filthy rich pushing around wheelbarrows full of cash.

It doesn't matter if a share of stock is worth $1 billion on paper if there is nobody willing to give you something of worth for it.

One share of Chipotle might be worth $1 billion in dollars, but it would probably be worth about six atoms of gold.

Tue, 04/09/2013 - 19:27 | 3428921 buzzsaw99
buzzsaw99's picture

25 bps in volatility is the author's evidence for unsustainability? lulz lulz lulz lulz lulz lulz lulz lulz lulz lulz lulz lulz lulz lulz lulz

Tue, 04/09/2013 - 19:29 | 3428927 buzzsaw99
buzzsaw99's picture

I'm sure old abe will break a sweat when he hits infinity and beyond. lol

Tue, 04/09/2013 - 19:34 | 3428941 Smuckers
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I like hockey sticks.

Tue, 04/09/2013 - 19:41 | 3428959 gould's fisker
gould's fisker's picture

Don't worry, I have it from a creditable source that we will all be taken care of no matter what happens:

http://www.thesun.co.uk/sol/homepage/news/4764841/Why-work.html

Tue, 04/09/2013 - 20:09 | 3429058 Clowns on Acid
Clowns on Acid's picture

Japan is taking the Krugman advice....if you own all the JGBs ....well you can just retire them. Then people only can equities....the stock maket goes up and you are wealthy.

The BoJ can do the Krugman platinum  coin for show if they like..... is just so easy....

Tue, 04/09/2013 - 20:21 | 3429078 q99x2
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I wouldn't worry about it. BTFD. Nukes are going to fly tomorrow.

Tue, 04/09/2013 - 20:27 | 3429089 ptoemmes
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We seem to be lagging behind so channeling Schumer " ...Get to work Mr. Chairman."

 

/sarc

Tue, 04/09/2013 - 20:28 | 3429095 adr
adr's picture

Just think of the equities to the moon stories when Toyota unveils the Trillion Yen car. Followed soon by the Quadrillion Yen Car.

I personally can't wait for Trillion Yen Sake.

I know people that can't wait for the Trillion Yen Happy Ending.

Wed, 04/10/2013 - 09:00 | 3430480 Downtoolong
Downtoolong's picture

And if that doesn't happen, I'll be looking forward to the day when they're giving out free Toyota Camry's with every tank of gas.

Or maybe not.

 

Tue, 04/09/2013 - 20:55 | 3429174 Tombstone
Tombstone's picture

We have seen how Benny's QE's have expanded the job market with about 100 million out of the work force.  So what's next for the socialists and central planners?  More QE and lots more welfare.  Throw O'bummercare into the mix and if we survive 2013, 2014 should be one heck of a ride; similar to a big time bull ride.  The only thing that suvives will be bull.

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