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Abenomics Leads To Worst Core Deflation In Three Years

Tyler Durden's picture





 

Six months in and a 30% devaluation in the JPY and it would appear Abenomics is not having quite the desired effect. With an oh-so-exciting 2% inflation target that we are sure will be appearing any second now, Nationwide CPI just printed -0.9% YoY - its worst (most deflationary) levels since April 2010, missing expectations by the most in 10 months! But wasn't Abenomics supposed to be... inflationary? Well it is in one place - Utilities costs are the only sub-index higher YoY (by 2.3%) - that's a good thing, right? Given that the only reason Abenomics will work is the propagandized concerns of inflation (as we noted here), this could be a problem for Kuroda (perhaps triple the monetary base will do it).

 

 

The market's immediate reaction: gold is pushing higher, breaking above
$1473, as this means moar, moar, MOAR balance sheet doubling by the
BoJ...

 

Gold has now retraced Fib 61.8% of its record plunge...

 

Charts: Bloomberg

 


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Thu, 04/25/2013 - 19:53 | Link to Comment kaiserhoff
kaiserhoff's picture

I'm sure if they would just eat more rice and noodles, everything will be fine.... oh wait.

Thu, 04/25/2013 - 20:03 | Link to Comment Major Major Major
Major Major Major's picture

If inflation is what they want, they must get the people off rice noodles and consuming moar cheese burgers from MCD... 20% right there.  Think outside the paddy.

Thu, 04/25/2013 - 20:30 | Link to Comment Stoploss
Stoploss's picture

Deflation... Hmmm.  One tough sombitch..

 

So, are we learning anything yet Ben??

Thu, 04/25/2013 - 20:36 | Link to Comment Poetic injustice
Poetic injustice's picture

That's happening because they are not printing enough. I mean, with 1 yen coins it would reach from Earth to Sun, but you need them to reach at least Alpha Centauri.

/sarc for new people on Zerohedge

Thu, 04/25/2013 - 20:57 | Link to Comment YC2
YC2's picture

Holy shit this is off the rails.

Thu, 04/25/2013 - 21:41 | Link to Comment Not Too Important
Not Too Important's picture

I saw an interview with Kyle Bass talking about his leverage on Japan. He's into it for a few dollars a year, and he said he's going to make over 300%. The interviewer asked him how much over 300%, and Kyle wouldn't commit. But he had the biggest shit eatin' grin on his face I've ever seen on a major player on the tube.

The only question I have is, when he wins as big as I think he's going to, will anyone be left standing to pay him?

Thu, 04/25/2013 - 22:10 | Link to Comment YC2
YC2's picture

That is the problem with a winning bet on a disaster with a Counterparty.

Seriously what a massive failure of a massive intervention.

Thu, 04/25/2013 - 21:21 | Link to Comment azzhatter
azzhatter's picture

that little convict bitch blodgett declared krugman the winner i thought. fuck you bernanke

Fri, 04/26/2013 - 00:17 | Link to Comment ReactionToClose...
ReactionToClosedMinds's picture

not to worry ... Bodgett is another propagandist.   His credibility is so suspect ..... let the sheeple read & believe.

I like my data 'empirical; which only Big Pitcher Blog can deliver

Apologies..... when someone (see either of above .... blowhards both) starts touting their own recipes ... then my disdain cannot remain hidden .....

 

 

Thu, 04/25/2013 - 21:19 | Link to Comment LaoTzu60606
LaoTzu60606's picture

nice, think outside the paddy...

do they have taco bell there?  great slogan...

LT

Thu, 04/25/2013 - 20:04 | Link to Comment Ropingdown
Ropingdown's picture

The newpapers and one blog are featuring the tremendous success of the new Chinese Noodle-cutting robot. 1/4 the cost of an employee, and tireless.  Who's going to be able to afford noodles or iPhones in China or Japan when both are made by robots owned by The Man?

Thu, 04/25/2013 - 21:36 | Link to Comment Not Too Important
Not Too Important's picture
Japanese 'Gov’t: Vegetables from inside Fukushima ‘no-go zone’ now ok to ship to stores — Farms preparing crops'

http://enenews.com/govt-vegetables-inside-fukushima-zone-ship-stores-far...

Let them eat Plutonium!

Thu, 04/25/2013 - 22:18 | Link to Comment Surrealist
Surrealist's picture

It's not 'more', it's

 

 

MOAR!!!!

Thu, 04/25/2013 - 19:57 | Link to Comment TumblingDice
TumblingDice's picture

Looks like another case of the dog refusing to be wagged by the tail.

It is also another case of the tragic inflation/deflation false dilemma. This binary way of looking at an entire economy will be the ruin of the modern financial system. Fortunately, this binary fashion of looking at it is the only way they know, since for central banks, inflation and deflation are very much as binary as life and death. When the system becomes so unstable and dynamic that it can't be so easily defined in these terms, then the overriding and default tendency for life (inflation) will spell the ruin of this whole shitshow. 

Thu, 04/25/2013 - 20:20 | Link to Comment Mojeaux18
Mojeaux18's picture

What's the "non-binary" way? (just curious)

Thu, 04/25/2013 - 21:20 | Link to Comment disabledvet
disabledvet's picture

in America it's called "pragmatism." http://en.wikipedia.org/wiki/Pragmatism "radical empiricism" NOT radical imperialism! here's one of it's most interesting personages: http://en.wikipedia.org/wiki/William_James . oh to what depths of depravity the United States has fallen. William AND Henry would be appalled at the ridiculous shibboleths of our age...the heresy's granted as "simple truths" and simply put the massive number of adherents to it all. Any case he could be meaning this puppy when talking about the "dog wags tail" conundrum: http://www.youtube.com/watch?v=SVS0IPsJgJA

Thu, 04/25/2013 - 21:23 | Link to Comment LaoTzu60606
LaoTzu60606's picture

think he means dichotomous rather than a continuum...

truth is that Japan has stable prices, @ the same for 12 years...

I will sign up for that...but not good for profits...

 

LT

Fri, 04/26/2013 - 07:48 | Link to Comment TumblingDice
TumblingDice's picture

There are many such ways to look at the economy/monetary system. Now we have neither inflation nor deflation but instead biflation where everyday living items rise in price and credit dependant items get cheaper. But generally in a healthy economy with perhaps a gold standanrd and without CBs we can have a dynamic rising and falling of prices occurring simultaneously and it would be ok. This dynamic system is much more stable than always having the pedal to the medal in creating inflation where you either have rising prices across the board or falling prices across the board.

Thu, 04/25/2013 - 19:59 | Link to Comment Dr. Engali
Dr. Engali's picture

Gives them plenty of room to print MOAR!

Thu, 04/25/2013 - 19:58 | Link to Comment slingshot
slingshot's picture

The increase in energy prices is like a body blow to the economy. 

 

http://www.ft.com/intl/cms/s/0/df67699c-a8df-11e2-a096-00144feabdc0.html...

Thu, 04/25/2013 - 19:58 | Link to Comment css1971
css1971's picture

Can I ask if the people in charge of the Japanese knobs and dials are qualified twiddlers? The appearance is they are twiddling randomly and ineffectually, though that may simply be my own lack of understanding.

Thu, 04/25/2013 - 20:03 | Link to Comment Ropingdown
Ropingdown's picture

You needn't ask.  Just do a quick check: Do they seem to be twiddling dials in the Bernanke style?  There, you've got your answer.

Thu, 04/25/2013 - 20:00 | Link to Comment thismarketisrigged
thismarketisrigged's picture

who cares, the nikkei 225 is going to pass the dow in numerical terms in a week or so.

 

that must mean things are working, because as we all know, the market is the best indicator of the economy (sarc)

 

japan deserves whatever they get. no pity from me here

Thu, 04/25/2013 - 20:01 | Link to Comment Ropingdown
Ropingdown's picture

And they say the same about you, too, Round Eyes.

Thu, 04/25/2013 - 20:01 | Link to Comment Ropingdown
Ropingdown's picture

Nipponese aren't stupid.  Their wages and pensions are not going rise at the inflation's pace, so they say to themselves "I better save even more now, just live on rice and a bit of fish, because only by saving now will I be able to afford even thouse in four years.  Big mystery.  The same thing is happening in the US for those whose jobs or inflation adjustments are not guaranteed by some government.  Except they are saying "I'd better get a new car before I go broke with a cheap loan, because next year inflation will cause my boss to lay me off and I'll lose my house."  This kind of thinking just doesn't penetrate the Ivy Halls and Marble Corridors.

Thu, 04/25/2013 - 20:23 | Link to Comment khakuda
khakuda's picture

Thank you. ZIRP IS DEFLATIONARY. It's not about helping the economy. It's about financing government debt.

Thu, 04/25/2013 - 21:23 | Link to Comment disabledvet
disabledvet's picture

key word being "debt." the irony that it doesn't in fact finance Government either should be lost on no one. "you still need taxes to do that" as sure as business needs revenues to succeed in this environment as well. Welcome folks...http://www.youtube.com/watch?v=kYf4kqnAWos

Thu, 04/25/2013 - 21:25 | Link to Comment LaoTzu60606
LaoTzu60606's picture

ZIRP?  ZIRP?  Slowly I turned...

 

LT

 

www.zirpinusa,com

Thu, 04/25/2013 - 23:42 | Link to Comment Treason Season
Treason Season's picture

Maybe the Nips aren't stupid but as a people they are political retards par excellence.

Thu, 04/25/2013 - 20:00 | Link to Comment Hopium Dealer
Hopium Dealer's picture

If Japan has a demographic growth problem, send me over there and I will drop more loads in Japanese bitches than they did on the U.S.S. Arizona.

Thu, 04/25/2013 - 20:09 | Link to Comment TumblingDice
TumblingDice's picture

Prepare to spend 100,000 Yen a night on shitty hotels.

Thu, 04/25/2013 - 20:01 | Link to Comment buzzsaw99
buzzsaw99's picture

They could send every person in Japan a pallet of Yen and they'd just hide it under the mattress.

Thu, 04/25/2013 - 20:09 | Link to Comment kaiserhoff
kaiserhoff's picture

As the Canucks say of themselves -

   We're just different.

   Where as, Kaiser would swiftly convert it to PMs, and if gf complains about the hard mattress, ... I need a new Bitch.

Thu, 04/25/2013 - 20:18 | Link to Comment maskone909
maskone909's picture

I dig your style. New bitch indeed.

Thu, 04/25/2013 - 20:03 | Link to Comment Racer
Racer's picture

Yes like the rest of us, things we need are soaring in price, but um, TVs and stuff ...I  will wait till next year to replace my this that and other piece or non important thing

Thu, 04/25/2013 - 20:03 | Link to Comment akak
akak's picture

"Core Deflation".

That means what, 'moderate inflation'?

Government CPI statistics are bullshit, no matter which nation one is looking at.

Fiat currency debasement/depreciation is a given, all hysterical and nonsensical government propaganda to the contrary.

Thu, 04/25/2013 - 20:26 | Link to Comment kito
kito's picture

one might agree with you, but when japan is trying to spark inflation, shouldnt their propaganda indicate some success????????

Thu, 04/25/2013 - 20:30 | Link to Comment akak
akak's picture

Give it time.

I strongly suspect that they are going to be "successful" beyond their wildest expectations.

Thu, 04/25/2013 - 21:14 | Link to Comment BigInJapan
BigInJapan's picture

Not when they're looking to justify a more aggressive printing program.
These sheep just don't wake up.

Thu, 04/25/2013 - 20:05 | Link to Comment greggh99
greggh99's picture

2 words. Lag time.

Thu, 04/25/2013 - 20:10 | Link to Comment bugs_
bugs_'s picture

I was telling the guys that we ought to move the Deflationists Lounge to Tokyo (ground zero) but they gave me a bunch of grief about how much it would cost.  We should have moved the lounge to Tokyo years ago.

Thu, 04/25/2013 - 20:12 | Link to Comment kevinearick
kevinearick's picture

The majority pleads that it must follow the edicts of the elite, to stand on the heads of those so disenfranchised, to build the elite a watchtower, to supply and fortify it, and to build their own equity around it, crying that the outcome cannot be changed no matter which way it votes, saying one thing and doing another, despite outnumbering the elite many, many times to one. Never send a eunuch as a proxy for a feminist to do a man’s job, unless you want to make the feminist appear intelligent in comparison. Beware the Black Widow, which seeks only to make you brittle as it incorporates another to break you. Place another dress on the empress and try, try, try again.

Thu, 04/25/2013 - 20:17 | Link to Comment e m m
e m m's picture

At least 'Fuel, light and water charges' are 2.3% higher, and probably more is coming if the currency drops further. So with constant wages, I guess that will help to deflate the demand for consumer goods even more.

Thu, 04/25/2013 - 20:26 | Link to Comment khakuda
khakuda's picture

After 20 years in Japan and 5 here, the arrogant central bankers have not figured out that they are a major source of deflation. ZIRP impoverishes people. If you can't save and earn interest, you can't spend. Equity wealth is mostly locked up in retirement accounts and not spendable now. Also, equity and home price appreciation that is manipulated is not real.

I have worked with retirees for decades and have never seen them as worried about the future. As long as the welfare state grows, deficits expand, laws are corrupted, asset bubbles form and implode, and interest rates are zero, it will get ever worse.

A trader who continues to double down on losing bets and misses EVERY BUBBLE gets fired. A central banker gets promoted.

Thu, 04/25/2013 - 21:30 | Link to Comment PC Load Letter
PC Load Letter's picture

This has never been about helping people. It's about keeping banks afloat and gov borrowing costs low. If rates go up, it's game over

Thu, 04/25/2013 - 20:23 | Link to Comment Mojeaux18
Mojeaux18's picture

Wait.  Does that mean they're not measuring inflation incorrectly? Or are they?

Thu, 04/25/2013 - 20:33 | Link to Comment Bunga Bunga
Bunga Bunga's picture

The only way out is a Seppuku.

Thu, 04/25/2013 - 20:36 | Link to Comment urbanelf
urbanelf's picture

Shit!  At this rate everything will be free in Japan!!!!

Thu, 04/25/2013 - 21:05 | Link to Comment astoriajoe
astoriajoe's picture

Had a consultant in my office the other day saying the Japanese have it all figured out and were doing absolutely the right thing here.

I don't think he asked any elderly Japanese about their living expenses or the size of their living space in his analysis. Could be wrong though.

Thu, 04/25/2013 - 21:09 | Link to Comment BigInJapan
BigInJapan's picture

Living in Japan I can tell you with certainty that my expenses have gone up by 20-25%.
I don't trust a fucking work out of Abekuro.

Thu, 04/25/2013 - 21:41 | Link to Comment Oldwood
Oldwood's picture

You just haven't realized that in Japan, measuring inflation says that sushi is just any dead fish! You got to love that chained CPI.

Fri, 04/26/2013 - 08:47 | Link to Comment hooligan2009
hooligan2009's picture

that makes sense to me. 

it's odd that governments/central banks want to create inflation, indirectly. when all they have to do to create it is to mandate wage, energy and food price increases; paid for by the central banks of course.

it is my view that a 30% curreny depreciation of the yen against a commodity basket of softs and energy must be causing massive price increases in Japan.

combine that with the need to import enenrgy until the methane hydrate projects come on line from 2015 onwards, and I am left quite staggered as to how prices/inflation is not c. 10% TODAY.

your experience correlates directly to my, distant, perception.

Thu, 04/25/2013 - 21:26 | Link to Comment phoolish
phoolish's picture

They need 3 more reactors to melt down.  That should help.

Thu, 04/25/2013 - 21:46 | Link to Comment Not Too Important
Not Too Important's picture

There are far more meltdowns/melthroughs than anyone can grasp. Daiichi isn't the only facility, just the only one that is 'allowed' to be spoken of.

www.enenews.com

Thu, 04/25/2013 - 21:35 | Link to Comment WTF_247
WTF_247's picture

Fucking morons they are.

Inflation only works if wages and other income are pegged to inflation + a bit.  If you have a lot of people retired then there are no wages to inflate.  If you have a majority of the population in low wage service jobs then wages will not inflate. All you do is dust the population and create anger and impoverishment.  The more inflation you spark the more demand drops.

To see that the above is not true anywhere in the world - take a look at wages vs financialization globally.  Once a country is mature they keep on going with the bullshit until wages lag inflation for decades.  Eventually it catches up and the game is up.  The more they financialize everything the worse it gets.  It creates inflation in that companies can charge more and people can afford it because the cost is spread out.  This can only go so far until you cannot afford the spread out costs either.  Then you do without.

Inflation cannot spark demand where there is no money to demand goods in the first place.

Thu, 04/25/2013 - 21:50 | Link to Comment ISEEIT
ISEEIT's picture

Japans primary problem is that shared with the rest of the 'developed' world.

GOVERNMENT.

Werks till it doesn't. And it ALWAYS doesn't.

What a bitch.

Thu, 04/25/2013 - 22:13 | Link to Comment Yen Cross
Yen Cross's picture

     Abenomics (¥) 

Thu, 04/25/2013 - 22:28 | Link to Comment zetsurin
zetsurin's picture

Oh bloody hell I wanted to buy more bullion, where's my dip!  don't want to buy it on an up day!

Fri, 04/26/2013 - 00:12 | Link to Comment Notarocketscientist
Notarocketscientist's picture

Japan should do the exact OPPOSITE of the US.

Instead of removing items from the CPI that would give a true picture of inflation as the US does...... 

Japan should ONLY keep items their 'CPI' that are inflating - and remove all items that are deflating.

Or perhaps they are already doing that so the deflation is in fact FAR worse than indicated.

In that case what they need to do is simply lie and make up a + number

Fri, 04/26/2013 - 01:32 | Link to Comment Trampy
Trampy's picture

BREAKING: BoJ HOLDS 0.1% rate, didn't even mention rate in its statement.

6J hit high 0.010185

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