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"Boldly They Rode And Well", Or Why Japan Is Not America

Tyler Durden's picture


Submitted by Daniel Cloud

Boldly They Rode And Well

I believe that Shinzo Abe has made a very serious strategic miscalculation. I used to be confused in much the same way he now seems to be, but I was cured of my confusion by thinking about Chinese inflation.

For a long time, I was puzzled by the fact that America’s endless multi-stage QE program seemed to have no effect on measured inflation, on the CPI and the PPI. But then I realized that by only looking at the United States and their three hundred million-plus people, I was missing the big picture, missing the most important part of its aggregate impact on the Earth’s seven billion inhabitants.

QE may never have much of an effect on the inflation rate in the fifty states of the United States of America, because it is workers in the developing world, and in particular, in China, who are the marginal hires in our still-globalizing, still-offshoring world economy. There is no distinct American economy, now, there is no Chinese economy, there is only the world economy, and the Fed makes policy for large parts of it. China has the kinds of structural rigidities in its labor, goods, information, and asset markets that make inflationary psychology very probable. It already had an ongoing and stubborn problem with inflation before QE started, so the required psychology already existed. And, perhaps most importantly, much of the money the Fed is printing doesn’t actually end up in the United States. It ends up being added to the reserves, and therefore the domestic money supply, of countries like China, who want to keep their currencies pegged, or quasi-pegged, to the dollar.

Why? Simply letting their currency appreciate would do to the Chinese what it did to Japan in the late ‘80’s. But to keep the yuan from appreciating against the dollar as a result of the increased supply of dollars from QE, the government of China must buy all the dollars anyone shows up with, at the pegged exchange rate. To pay for them, China must issue yuan, and pay them out to the holders of those dollars. That makes the supply of yuan in circulation increase by the same amount – as the dollars are added to the country’s reserves, the domestic money supply has a matching increase. The authorities can try to “sterilize” this hot money, by selling treasury bills, but experience has shown that the flows are simply too large and long term for this to be very effective. 

Since this means the money supply in China is constantly increasing at what would otherwise be an undesirably rapid rate, the result, as readers of Zero Hedge already know, is a persistent problem with inflation. Inflation is a form of taxation; by printing money, the State funds itself by taking a little bit of wealth away from each holder of the currency. (Or in the case of the dollar, of all the various currencies pegged to it…)

In 2012, according to a recent post on ZH, citing the WSJ, nominal private sector wages in China were up 17.1 percent. This means wages are compounding at a rate much, much higher than GDP growth, and the process shows no signs of stopping. That endless increase feeds through into product prices – not the prices of exported products, since it’s necessary to stay competitive in dollar terms, but the prices of ones sold into the domestic market. The same effect is echoed all through the developing world, in any country that wants to participate in dollar-based world trade, and feels it has to keep its currency in a stable relationship with the dollar to do so without undue disruption. That increase in the cost of the goods and services available to them makes the middle class, and the many people who are still poor in those countries, worse off than they otherwise would have been. (It was rising food prices, tied to Chinese demand, that were the straw that finally broke the camels’ back in Egypt and Syria.) On the other hand, the American policy that ultimately causes it helps the Fed’s main constituency, developed-country banks, and helps developed-country governments keep spending, and allows developed-country political actors to maintain their patronage networks.

QE works, politically, because it is mostly a tax on consumers in the developing world. It keeps the banking system in Europe, and therefore the rest of the world, from collapsing, for the time being, it maintains the existing set of political arrangements, and the costs fall mainly on people who will never have a chance to vote in an OECD election. Ben Bernanke’s great triumph, as an ideologue, is to have come up with a Rawlsian, distributive justice argument in favor of what really amounts to taxing the poor to protect the assets of the rich. (To add insult to injury, in a country like China, where nobody ever gets to vote on anything, it’s taxation without any hint or whisper of representation. Egypt showed us what that can lead to, though as Americans we shouldn’t need reminding.) Given the actual goal, which is to maintain the status quo in world affairs as long as possible, it isn’t clear what other policy could have been chosen, but the justification offered in public is, of necessity, somewhat ironic.

The risk to world markets, at the moment, comes from the fact that the people who run the Fed and Treasury may actually be sincere in offering that justification, that the irony may be unintended. Their somewhat myopic focus on the developed world – which is, after all, where all the relevant political constituencies live – means that they may not actually understand that robbing the poor to pay the rich is what they’ve been doing. All they know, perhaps, is that the policy didn’t cause anyone who mattered to them any pain – so it seems possible that they have perceived it as actually costless, as a free lunch. It’s easy to be incurious about how migrant workers in Wuhan are doing, when the Chinese press can’t really cover their situation, and you never meet or talk to such people yourself. (Somehow they don’t get invited to G7 meetings…)

Certainly, the Japanese don’t seem to have been let in on the joke. We’ve been doing QE for years. It hasn’t had any of the predicted catastrophic effects. We kept obnoxiously pointing this out to everyone, and voicing our exasperation at their failure to emulate us. Eventually the political pressure for adopting such an apparently costless, and riskless, and kind-hearted policy became irresistible, and there was a coup at the Bank of Japan.

The mistake Abe is making, though, is to think the same trick that worked for the US will work for them. The problem, as Shirakawa no doubt realizes, is that the two country’s situations are not at all analogous, because the yen isn’t really a reserve currency in the same way the dollar is. There is no population of natural sovereign buyers who will be forced to print their own currency to mop up excess yen, as there is for the dollar. No sovereign is going to want to dramatically increase the allocations of their country’s reserves to the yen, not when it’s in the middle of being deliberately devalued, or really ever. Russia and China and Saudi Arabia don’t need any more yen, they have plenty. Oil isn’t priced in yen. Japan isn’t the world’s largest economy, or even its second largest. World trade isn’t conducted in yen. The emerging economies will just let it collapse. There is no natural sovereign sink for yen to drain into, as there is for the dollar, no group of buyers of last resort with bottomless pockets and no choice but to buy.

But that means nobody else is going to want to hold yen either. Why own a currency when the issuer publicly plans to make it worth less, and to raise the inflation rate well above the current long-bond yield at the same time? That isn’t a store of value; it’s a live grenade. People in the private sector, wishing to survive, will fling the grenade away. There is nothing to stop them, no natural buyer the other side, because the only player who could possibly defend the yen – the BoJ – is publicly committed, in a politically irrevocable way, to the opposite path. Because of the relative success of QE in the United States, policy-makers will be complacent about the risks. 

The mistake Abe is making is to generalize from the experience of the central bank of the world’s primary reserve currency to his own very different situation. Japan can’t tax its allies to support its insolvent State by printing money, because (aside from the US, which is also broke) it has no allies. Any liquidity it squirts at them will simply splash off. What will really happen is, therefore, exactly what you would expect to happen to a country with a convertible currency and a very large national debt which credibly announces that it plans to abruptly double its money supply – there will be a scramble to get out, and the yen will decline, or Japanese bond yields will rise, until one or the other reaches a level that offers some prospect of a positive return. Though of course, there will be overshooting.

That means a much, much lower yen, and/or much higher JGB yields, which would of course be instantly fatal. So, as George Soros has already warned, what we may actually get (unless Abe flinches, and reverses course, which is hard for him to do now he’s actually pulled his sword out, yelled “Banzai!”, and started the cavalry charge) is an uncontrolled devaluation of the yen, to some level that would seem wildly unrealistic to us now, with incalculable risks for the stability of world markets. And it’s all based on a mistake, an incorrect analogy with America’s situation. “Boldly they rode and well, into the jaws of Death, into the mouth of Hell…” The nobility of failure may, I suppose, be some consolation, for Abe, personally, at least.

The only really unusual thing about this particular case is the fact that the uncontrolled devaluation has been publicly announced, in advance, in a way that’s extremely credible. That makes it an unprecedented experiment – which could easily turn out to be the recipe for an unprecedented disaster.


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Sat, 05/18/2013 - 15:33 | 3576256 lolmao500
lolmao500's picture

Unlike Japan, some people in America have a spine and are armed.

Sat, 05/18/2013 - 16:12 | 3576318 negative rates
negative rates's picture

I can see the sun setting on the British Empire right now.

Sat, 05/18/2013 - 16:21 | 3576337 Vlad Tepid
Vlad Tepid's picture

Do you mean North America?  I think there are some pretty tough, armed,cartel-ish hombres south of the Rio Grande...north of that, not so much.  Not after the Twinkie delivery anyway.

Sat, 05/18/2013 - 17:07 | 3576412 CrashisOptimistic
CrashisOptimistic's picture


This guy is just wrong.

Toyota is not going to be allowed to destroy Obama's showcase General Motors by winding up with $9000 Camrys.

The Fed will buy yen.  That will be that.

Sat, 05/18/2013 - 17:20 | 3576434 negative rates
negative rates's picture

I think the Fed drives a mercedies, just to keep his image up.

Sat, 05/18/2013 - 20:58 | 3576794 AssFire
AssFire's picture

They drive Fiat, not Mercedes.

Sat, 05/18/2013 - 21:22 | 3576848 jekyll island
jekyll island's picture

The dance will have to end sometime, and most likely the fuse will be lit by a politician who makes a huge mistake, errr, miscalculation.  Sure is putting a lot of faith in the fed riding to their rescue, that would be one hell of a currency swap line.  On the other hand, perhaps both Japan and US realize they are fucked and are working in tandem.  Sure will be interesting to see who craters first.  

Sun, 05/19/2013 - 15:37 | 3578189 resurger
resurger's picture


Sat, 05/18/2013 - 18:23 | 3576524 ISEEIT
ISEEIT's picture

Maybe. Maybe not. Depends on what they're up to really. The degree and sophistication of their attempts to centrally control us is admittably impressive. I know as a fact it will go off the rails at some point though. And I mean entirely as in epic crash off the rails, not the hobble along broken sort of off the rails we see today. (FORWARD?)

Japan is expendable from a globalist perspective. We are all expendable from a globalist perspective. In fact we all must be eliminated entirely in the sense meaningful to us..From the globalist perspective.

Round and round we go.

Been here. Done this.

The difference is that this time 'it' is going for the whole enchilada.

Why not though huh?

The definition of insanity is what?

Sat, 05/18/2013 - 21:11 | 3576828 noless
noless's picture

Believing or acting in a way outside of the dominant paradigm or belief structure, to the point of actions which lead to personal alienation from the parent culture; generally exemplified by repeated actions which are sponsored on the belief in evidence not deemed suitable or within the realm of acceptable reason of said culture.

One extreme is that of the mentally defective, who truly cannot live without but still rejects innately the will or understanding of the majority, but this principle can also be applied to those who can in fact live within the enforced system, but based on their varied experiences reject certain central ethos of the predominant culture which in turn leads their lives to be painted in the same light as the truly deranged, those in the latter group are generally politely referred to as eccentrics in times of peace, or invariably; terrorist, anarchists, or just plain criminals in times of war.

Sat, 05/18/2013 - 18:42 | 3576558 Gene8696
Gene8696's picture

Yea, built in Kentucky. More Camrys built in US than Ford F150s.

Sun, 05/19/2013 - 03:16 | 3577395 Lost My Shorts
Lost My Shorts's picture

The guy is just wrong, but for different reasons, I think.  You would never see $9,000 Camrys because some of the inputs are commodities at world prices and simply devaluing the yen doesn't help.  They can only trim the labor and some overhead charges in dollar terms.  Yes, that is what they intend -- to make Japanese goods much more competitive in export markets and/or to bring some manufacturing back to Japan (where they have also been exporting good jobs to China and SE Asia just like the US has done.)

What all these wise guys talking their books fail to mention is:  Japan was on a totally unsustainable path down a financial black hole already prior to Abenomics.  They never had a choice of black hole or no black hole.  Their only choice ever was which hole.  What they are doing is forcing a 50% devaluation of their otherwise totally unpayable debt, and bringing jobs back onshore, and making the Japanese economy much more competitive.  Of course it will wipe out domestic savers who hold the debt, but Japan is a much more cohesive society which has the wherewithal to tear up and rewrite their social contract.  All those Mrs. Watanabes who hold the domestic debt lived through a charmed time where taxes were artificially low, and they were very wealthy by world standards, and they could travel cheaply around the globe on a wildly over-valued yen.  They were living the high life on an illusion of borrowed money.  Now it's payback time, and they will understand.  What Abe is really thinking is:  how can the government keep the old folks from starving on the streets after their savings are hacked in half.  Answer:  start generating a lot more real wealth domestically by bringing jobs back onshore and making Japanese industry more competitive and having the country live within its means.  To say that is in any way comparable to US Fed policy is nonsense.  US Fed policy is all about keeping TBTF insolvent banks rolling in profits, and they don't give a sheet about the real economy or real wealth.

Japan is doing the obvious sensible thing in their situation.  No option would be painless, but Abenomics actually has a foundation in reality and would be the least painful.  Much better than riding their debt to 300%, 500%, 1,000% of GDP on the crest of a wildly overvalued yen.

Sun, 05/19/2013 - 06:20 | 3577468 css1971
css1971's picture

Korea devalued a while back. Which is why Samsung is all over the place.

GM Korea:

GM Chevrolet Malibu vs Toyota Camry

Sun, 05/19/2013 - 10:04 | 3577678 BigInJapan
BigInJapan's picture


Japanese cars pretty much never come from Japan:

"Toyota Motor Manufacturing Kentucky, Inc., (TMMK) is located in Georgetown. Engine manufacture - 2GR-FE and 2AR-FE. Vehicle manufacture and assembly - Camry, Hybrid Camry, Avalon and Venza."

Sun, 05/19/2013 - 10:50 | 3577718 GMadScientist
GMadScientist's picture

Thanks for the warning!

Sat, 05/18/2013 - 17:11 | 3576420 CrashisOptimistic
CrashisOptimistic's picture




Sat, 05/18/2013 - 17:18 | 3576429 asteroids
asteroids's picture

The Chinese should dump all their US bonds. Boom! Game over. Any other paths has them as partners to the FED.

Sat, 05/18/2013 - 17:24 | 3576437 Money 4 Nothing
Money 4 Nothing's picture

They would rather use them to purchase Gold... sshh.. don't tell anyone.

Sat, 05/18/2013 - 17:34 | 3576452 Boeing Boy
Boeing Boy's picture

The Fed will simply print and buy.  No Problema

Sun, 05/19/2013 - 03:28 | 3577400 Lost My Shorts
Lost My Shorts's picture

That's brilliant !!  You must run the Bank of China.

Step one:  dump all the bonds so the Fed can by them back with printed money at 30 cents on the dollar.  That results in a 70% paper loss for China, but well worth it to show Mr. Big Nose who is boss.

Step two:  now you have a bunch of dollars, which are a different type of US paper that pays no interest.  Bleep, what do we do with those?  Buying US goods is out of the question.  Mr. Big Nose would like that, and we can't do anything Mr. Big Nose would like.

Step three:  dump the dollars on the currency market.  Sends the yuan-dollar cross to the sky, undoing a decade of hard work manipulating the yuan downward.  Is that Mr. Big Nose laughing ??  Bleep bleep bleep !!!  Always trying to deny China the glory it is due !!

Sun, 05/19/2013 - 10:57 | 3577731 GMadScientist
GMadScientist's picture

Not to mention that pile of dollars would be worth significantly less by the time Ben got done buying paper with both grubby mits, but they'd still be good for buying gold, oil, and soon-to-be-ex US companies, all of which will make Mr. Big Nose frown just a little bit.

Sun, 05/19/2013 - 10:06 | 3577680 BigInJapan
BigInJapan's picture




And sell their shit to whom, exactly? Ze Churmanss?

Sat, 05/18/2013 - 17:09 | 3576418 greatbeard
greatbeard's picture

>> some people in America have a spine and are armed.

Can you mention anything they have stood up for, these spine and gun owning folks?  Our rights have been trashed, policians are fully bought and paid for, with corporations running America soley for the good of the already obscenely wealthy.  Just what have these so called gun toughies done to stop the progression?

Sat, 05/18/2013 - 18:02 | 3576491 Harbanger
Harbanger's picture

"Just what have these so called gun toughies done to stop the progression?"

Key word is progression, decades of slow progression.  Many individuals have stood up in the past and were singled out and targeted.  The real question is who will survive.

Sun, 05/19/2013 - 11:34 | 3577803 greatbeard
greatbeard's picture

>> Many individuals have stood up in the past and were singled out and targeted.

Name something recent, who, and what they were standing up for.  Ruby Ridge is ancient history.

Sat, 05/18/2013 - 21:27 | 3576862 noless
noless's picture

Are you calling for or inciting armed rebellion?

How do you feel about suicide reports made by those who gain advantage by a persons voice disappearing?

He pulled the trigger twice, directly in the back of his head, strait shot , both times.

There is a reason why the term "suicided" exists, the power cannot be confronted except through their own hypocrisy, so as to encourage them to fight against themselves, instead of using your children like pawns.

What is your argument?

Sun, 05/19/2013 - 08:28 | 3577581 greatbeard
greatbeard's picture

>> Are you calling for or inciting armed rebellion?

Kindly point out the part of my post that is confusing you into thinking I'm calling for armed rebellion and I'll explain what I really meant.  If anything, it was the previous poster who was going in that direction.  I've just had my fill of these chest pounding, do nothing, gun folks.  Yeah, they've got ther guns, lots of them.  And yes, they make noise, lot's of it.  But they don't as claimed, use said guns for any good purposes.  Yes, they kill friends and family and loved ones, mostly.  Occasionally one wanna be Rambo goes off the deep end and takes out a whole bunch of innocent, harmless people.  I bet I can name 100 idiotic gun actions for every productive gun action the OP could muster.

And I'm not particularly anti-gun.  I own guns, I have a CCP and I responsibly target shoot.  Unfortunately, there is a minority of gun owners who's mouths are much bigger than their intellect, and they give guns a bad rap, much like the minority of the Muslims population.  If you have a gun, fine, just keep your mouth shut, your gun safe, and use it for what it's intended for, whatever that happens to be.

Sun, 05/19/2013 - 10:59 | 3577736 GMadScientist
GMadScientist's picture

Don't blame the puppets for their Pavlovian tendencies...they're just doing as they're told.

Sat, 05/18/2013 - 23:18 | 3577161 Marigold
Marigold's picture

Yeh , just look how you Pussies behaved in Boston ... USA USA

Sat, 05/18/2013 - 15:54 | 3576264 Yen Cross
Yen Cross's picture

   Z/Hers will love this link.

  I've enclosed the google translate link for you, {Non Frog} speaking citizenism.

Sat, 05/18/2013 - 20:58 | 3576796 Element
Element's picture

Noiseworks - Welcome To The World

Sat, 05/18/2013 - 15:41 | 3576267 rosiescenario
rosiescenario's picture

"...and they rode on."  From Blood Meridian.....the Judge's gang bears many similarities to our Feds....Tarantino really needs to make that book into a movie.

Sat, 05/18/2013 - 15:48 | 3576275 css1971
css1971's picture


I think Ben and the FOMC know exactly what they're doing. The talk of tapering only started after the CNY appreciated a tiny bit against the USD over the last month or so. Ben knows fine well that all the inflation is getting exported and also that when the asian pegs lift, it's coming right back.

If you take a look at the CNY vs USD over the longer term, the crashes in the US occurred when the CNY was appreciating fastest and inflation on chinese goods was highest in the US. i.e. The marginal buyers in the US are completely dependant on Chinese goods.

p.s. Spot on on Japan. Toast.

Sat, 05/18/2013 - 16:33 | 3576352 Imminent Crucible
Imminent Crucible's picture

Yes, except for one thing. The author makes a deadly error here: "QE may never have much of an effect on the inflation rate in the fifty states of the United States of America,"

As other posters have noted, QE is not a new policy. The process of targeting interest rates has always been accompanied by targeting an increase in money supply, although the Fed has never been anxious to draw attention to this. And that's why gasoline doesn't cost 33 cents a gallon any more, as it did when I got out of school.

And while it's true that the great majority of inflation generated by the Fed has been exported, that process is coming to an end. The Chinese, Russians and pretty much everyone else are sick of absorbing our excesses in order to access our markets. They're tired of the petrodollar standard, and tired of the endless economic bullying.

So they're executing their own cross-currency arrangements to avoid the expense of going to the dollar markets every time they need oil or want to settle international transactions. Iran insisted two years ago they would not accept dollars from Japan for their oil, only yen. China and Australia will conduct business in RMB and AUD directly. That means a huge supply of dollars that are no longer needed in world trade are coming home. They will be here long before the Fed has figured out how to sop them up.

Sat, 05/18/2013 - 18:25 | 3576504 defencev
defencev's picture

Yes, except for one thing. The author makes a deadly error here: "QE may never have much of an effect on the inflation rate in the fifty states of the United States of America,"


While it may be true, you are the one who are making a deadly error. The facts are that everybody from Europe to Australia and from Korea to India are cutting interest rates. They cannot get rid of USA and dollar for now and therefore the music will go on. The one key number to watch is the US share in World trade. While it is slowly declining, it is still pretty high and for now it will be difficult to undermine the status of Dollar as world reserve currency.

  The author, however, is deadly wrong in a different respect. Money printing is nothing new in Japan. In fact, they are the ones who started printing in 80 s and they still cannot reach any kind of inflation. By some estimates, to reach 2 percent inflation , the exchange rate should be 120 yen to Dollar and they still have some way to go.

Some other factors are also working in US direction as growing production of oil and gas in US and reduction in spending.

 Tyler and co will prove to be fundamentally wrong about everything:stock market, prices of PM , bitcoins....

Do not forget while stupid libertarians rely on their failed ideology in the empty hope of total collapse, people like myself make real money precisely on US and Japanese stock markets.

Sat, 05/18/2013 - 21:38 | 3576878 noless
noless's picture

Why do countries mask blatant protectionism of industry through means of fiscal and monetary policy? Why don't the Nipponese just openly nationalise companies with export potential and fully fund operations through fiat printing?

Oh wait..

Sat, 05/18/2013 - 22:38 | 3577068 Imminent Crucible
Imminent Crucible's picture

Sorry, defencev. You just made the commonest and deadliest error of all: Imagining that the USD's value is measured by the USDX. That's the error the Fed wants you to make, and you took the bait. As long as the USD stays above DX 80 or so, you think "it's a strong dollar". The dollar's value is not a function of interest rates or debasement rates in other worthless paper currencies. It's called a Race To The Top, right? Um, no. It's a race to the bottom. He who has the most worthless currency wins the international trade game. That's why Japan, Inc. is doubling the yen supply; they're desperate to see the JPY crushed, to get exports up, to reduce real debt levels, and to raise asset prices.

In the meantime, all fiat currencies can sink together at the same rate and the USD keeps its DX82 level, even as gasoline goes to $20, a Big Mac costs $25, and no one will sell you an ounce of gold at any dollar price.

Tyler will be wrong about everything? That's quite a crystal ball you have there, Saruman. I'm not too impressed. I bought silver when it was $4 an ounce. Now it's only $22 or so--on paper. But try to buy an ounce, and you'll find that the real price is anywhere from $26 to $50 and higher, depending on the form and the venue.

I don't think you know much about Libertarians, either. Or Austrians. I'm not hoping for "total collapse", I'm hoping we avoid it. But even partial collapse will be hellish, and your stocks and paper money aren't likely to hold up well when the markets finally realize that "“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”

Sat, 05/18/2013 - 19:26 | 3576647 g speed
g speed's picture



The fed has it figured.      channel the money into US equities-- and lose it all in a bear market--many many zeros will be lost--bank cash will go to cover derivitives/hedges. many more zeros will be lost. Oh I almost forgot --cash will be king---you heard it here ---By the way in 2008 or so the bernake told member banks to get cash-- its in the minuites some where( I remember he said it but not the time or place)

before you down arrow recall the last "depression" and the one before that and the one before that----cash was king-- its the plan of course. inflate the bubbles into a deression-- assets are "pennies on the dollar" all assets. As for foriegn trade --in a world wide depression there is none-so the currency of the country you're in is the boss-and maybe the dollar ????

A country needs a huge stock market to lose inflated zeros in-- we have that for sure--

Sun, 05/19/2013 - 13:08 | 3577959 Stares straight...
Stares straight ahead's picture

Yes. China is dependent upon American consumerism and cheap production of goods exported, US sells bonds to China (and sponges up the occasional low demand by POMO), printing money like mad, China is locked into more bond purchases to maintain cheap exports.
Japan has no foreign demand for a weak Yen until they up the ante by massively devaluing it. Now it essentially a game of " chicken" as the US is forced to buy japanese bonds, to maintain Yen in the same way China is buying US bonds, to maintain a stronger dollar.

Essentially, China is indirectly forced to buy yen. exporting inflation to China.

Japan gets to ride the tailcoats of a reserve currency.

What's the next step as Chinese labor and goods inflate? More US bond purchases?

This will go on for a decade because the US taxpayer ain't aware that he is selling off his kids and grand kids. (Or doesn't care)

Sun, 05/19/2013 - 13:13 | 3577960 Stares straight...
Stares straight ahead's picture

@ aurora ex:
my psy op supervisor approved this message! ; )

Sat, 05/18/2013 - 15:50 | 3576281 fourchan
fourchan's picture

sink to drain into far.

Sat, 05/18/2013 - 16:37 | 3576283 Joe A
Joe A's picture

WilliamBanzai, your take on this......?

Sat, 05/18/2013 - 15:53 | 3576287 Yen Cross
Yen Cross's picture

    Japan isn't even close to Americanisms.   America has dressed the pig of stagflation, in stars and stripes.

   Oil is $95 a bbl, and a can of beer costs almost $2. WINNING


    Cheech and Chong swimming pool clip.

Sat, 05/18/2013 - 16:01 | 3576300 Atomizer
Atomizer's picture

Let’s see who wears the pants after the Yen Carry Trade is phased out.. once again. The USD will soon be an overheated flight for safety.


The Return Of The 'Yen Carry Trade' Benefits The Currency Harvest ETF

Sat, 05/18/2013 - 16:05 | 3576304 Yen Cross
Yen Cross's picture

   The $ is going to get pounded(no pun intended), im short cable next week. You were warned.

Sat, 05/18/2013 - 16:11 | 3576315 Atomizer
Atomizer's picture

Go right ahead and short the USD.  Look forward to hear your ZH update on the missed opportunity in getting squeezed.

Sat, 05/18/2013 - 16:17 | 3576327 Yen Cross
Yen Cross's picture

     It takes two sides to make a trade. good luck

Sat, 05/18/2013 - 16:20 | 3576331 Atomizer
Atomizer's picture

You’re on the wrong side

Sat, 05/18/2013 - 16:48 | 3576359 Yen Cross
Yen Cross's picture

   Yer right. I'm on the wrong side.

                                                                                                I took 1/2 profit on my usd/jpy proceeds to short the$.

   Here's the real time chart Atomizer. [IMG][/IMG]
 I still have 1/2 of the trade open.

Sat, 05/18/2013 - 16:52 | 3576382 fonzannoon
fonzannoon's picture

What the author is missing here is that if the Yen blows up the long end of the US curve will blow up as well.  That means Ben will end up having to print his ass off to buy that stock being dumped while trying to convince everyone he is "tapering".

Sat, 05/18/2013 - 16:56 | 3576391 Yen Cross
Yen Cross's picture

  Fonz, I'm reaching out 5 trading days. I apologise if you're confused.

Sat, 05/18/2013 - 17:00 | 3576400 fonzannoon
fonzannoon's picture

Oh I did not mean to weigh in on what you are doing. I am thinking out loud in general. I did not see what your trade is? You going short the $?

If I had to take a shot, and I don't have your acumen, I would go short dollar here and long Yen. Abe has to try to talk it down for a bit. That is just my guess.


Sat, 05/18/2013 - 17:06 | 3576407 Yen Cross
Yen Cross's picture

     One of my 'Queen Palms' needs triming.  Consider me background noise...>

Sat, 05/18/2013 - 17:09 | 3576416 fonzannoon
fonzannoon's picture

go get em man.

Sat, 05/18/2013 - 18:05 | 3576495 Bohm Squad
Bohm Squad's picture

I'll be watchin' the 1.503XX's to 1.513XX's really closely...

Sat, 05/18/2013 - 18:12 | 3576496 Yen Cross
Yen Cross's picture

  Bohm Squad

Vote up!

Vote down!


I'll be watching with baited breath>  I love my new avatar. Thanks Tyler (well done)

Sat, 05/18/2013 - 18:24 | 3576529 Atomizer
Atomizer's picture

Wish you the best of luck Yen Cross. Many of us have watched this movie before.

Sat, 05/18/2013 - 20:23 | 3576731 Yen Cross
Yen Cross's picture

      Really? This juggernaut is a first for me. I'm certain your younger than me. 

   I've always liked you Atomizer.  Send me a chart. I send charts all the time.

Sat, 05/18/2013 - 21:16 | 3576836 Atomizer
Atomizer's picture

Likewise Yen. Just looking out for you. Again, do as you please. I'll bet we are about the same age. 

Sat, 05/18/2013 - 15:57 | 3576293 bank guy in Brussels
bank guy in Brussels's picture

Some good points in the above article about the tragic export of inflation to developing countries ... particularly raising their food prices, which is also the murderous result of food price speculators from Goldman Sachs and the rest of the Western establishment

But some missing pieces in the above too

QE is only one-aspect of the Japanese Abenomics policies, one-third of it or maybe less ... remaining pieces will go more into full swing after the Japanese parliamentary election ... as more sophisticated articles on ZeroHedge and elsewhere have pointed out, the Japanese have a reasonable chance of pulling this off, and have much more leeway re Japanese bond yields etc.

But the biggest thing is that, as Jim Willie has been most emphatic in pointing out, the days of the US dollar as reserve currency are ending ... rather quickly and dramatically

The new WTO head chosen from Brazil, against US wishes and versus the US-favoured candidate from Mexico, is just one more sign of that ... the writing is on the wall. The BRICs countries and the developing world have been setting up an entire different global trading system ... and we are not far from that being implemented in place of the dollar

Sat, 05/18/2013 - 16:53 | 3576384 Seeking Aphids
Seeking Aphids's picture

Absolutely agree, BGB. The dollar will go up short term with any signs of a resurgence in the US economy but, at the end of the day, it is the last gasp of a currency that is no longer the world's reserve....the 'get out of jail free' card can only be used once and it has been very thoroughly and extensively played by the Fed indeed.........the Chinese won't get burned again and the Japanese have decided that two can play this game - with what will be disastrous results. So, if we are shorting the Yen and, eventually, the $US, what will that leave as a currency we can get behind...not the Euro, surely. How about a new reserve currrency based on a basket of curencies including the $US, the pound sterling (well not really a pound of silver, just a piece of paper with a picture of the queen on it), the Yen and the Yuan....oh, and gold, real gold - not a picture of gold on a piece of paper or an ETF share......

Sat, 05/18/2013 - 15:58 | 3576294 brunoaa
brunoaa's picture

Totally agree. This is why I am not so sure sure about Kyle Bass's bet on interest rate explosion in Japan. If we have an explosion in rate and strong devaluation of the yen, Japan will probably put in place some kind of capital control. Depending on the structure of Kyle's bet (investment) he may collect in non convertible yens which is not so good.... I asked him the question at the last Altegris conference in Carlsbad, he told me he had a contingey plan for that, so be it.

Sat, 05/18/2013 - 16:08 | 3576309 q99x2
q99x2's picture

Let the banks fail. Then burn them down.

Sat, 05/18/2013 - 16:11 | 3576314 Yen Cross
Yen Cross's picture

  I'm quite content being a 'Credit Union' share holder, with a small amount of cash for day-to-day transactions.

Sat, 05/18/2013 - 16:18 | 3576330 They trynna cat...
They trynna catch me ridin dirty's picture

Then watch it start all over again as "those of whom we are not allowed to name" volunteer to arrange a whole new system for us.

Sat, 05/18/2013 - 17:35 | 3576456 Herd Redirectio...
Herd Redirection Committee's picture

Exactly.  4 days after a huge crash, taking everything offline in terms of electronically transferred money, "we have come up with a better system"


The right answer will be "We will have court trials, and then there will be a dialogue to come up with a new bimetallic currency system".

Sat, 05/18/2013 - 17:30 | 3576445 Money 4 Nothing
Money 4 Nothing's picture

Bankers not withstanding.

Sat, 05/18/2013 - 16:09 | 3576311 andrewp111
andrewp111's picture

Wait a minute. Japan has done QE before, about 10 times before over the last 20 yrs. This time is bigger and is accompanied by more fiscal stimulus, but so what? Every time they did it they got a temporary stimulus and then sunk deeper into the mire. And there is demand for Yen - for the carry trade. Big speculators borrow in Yen and buy US and EU assets. They need Yen to pay the loans back, but since the Gov't of Japan wants the Yen to go lower over the next 2 yrs, they expect they can pay back in a cheaper currency. If there is enough demand for Yen loans from speculators, that demand could prevent the Yen from dropping as it should.

Sat, 05/18/2013 - 16:28 | 3576345 Mine Is Bigger
Mine Is Bigger's picture

Well, more demand for yen carry trade should accelerate the yen's fall, not "prevent the yen from dropping."

Borrowers sell yen to buy dollars, euros or whatever the currency their investments are denominated in.

Sat, 05/18/2013 - 17:39 | 3576463 Herd Redirectio...
Herd Redirection Committee's picture

Exactly.  You borrow yen, but you don't hold them.  You immediately convert into USD, equities etc. 

Sat, 05/18/2013 - 16:35 | 3576355 TrustWho
TrustWho's picture

Exactly why italian, spanish, greece, portugal, irish bonds have risen in price with the yen QE. How low can these really bankrupt sovereigns' bond rates fall-even with the Draghi VERBAL promise? If the demand for these risky bonds falter and at some point falter they must, this sick ponzi will collapse. When the YEN collapses, the dominoes will NO longer be standing.

I will never understand how all the PhDs in all the western central banks could fail to understand the essence of this document. They must understand, so I get really scared for my kids.

We know the BRIC countries are pissed at this stupid policy. I am surprised they have played the waiting game for so long. They must understand, so I get really scared for my kids. 

Sat, 05/18/2013 - 16:12 | 3576317 Stuck on Zero
Stuck on Zero's picture

I just love it when people speak of misguided policies and unintentional consequences when a group of pathological criminal gangsters take over government. Call them and their policies for what they are.


Sat, 05/18/2013 - 17:31 | 3576447 FreeMktFisherMN
FreeMktFisherMN's picture

Exactly. These are not 'un'-intended consequences. 

Sat, 05/18/2013 - 17:41 | 3576465 Herd Redirectio...
Herd Redirection Committee's picture

They are corrupt, not incompetent.  We are so PC these days, we never want to use the word "Evil".

Sat, 05/18/2013 - 16:19 | 3576322 WhiteNight123129
WhiteNight123129's picture

Daniel Cloud you have it backward.

When you do not have reserve currency status, you can not lose this status.

US is the only country which can lose the reserve currency status, and then that will be interesting to note what happens. It is worth noting the effect of demonetization of Silver and see what happens to its price against Gold as a result. Expect teh same thing with USD, partial demonetization.... ouch.

And there is huge inflation in financial assets, unfortunately he money now sloshing in financial assets will leak in the real economy and the reason is that the bond market is mortally wounded it will not collapse but degrade more and more.

As Fullarton explains rising interest rates and inflation are the same thing, as rising interest rates make the rents higher in retailers, which have to pass along into the price of goods and services.

JC Penney has below market lease, which means that rising and rising interests and rent give them a higher and higher advantage as the other retailers are forced to pass the rising interest rates in their goods and services. This in turn pushes up the inflation and inflation expectation which make the long bond yield rise and rise.


Sat, 05/18/2013 - 16:18 | 3576328 I am Jobe
I am Jobe's picture

Yes with IPHONE and IPAD along with the latest apps.


Sat, 05/18/2013 - 16:18 | 3576329 Yen Cross
Yen Cross's picture

     S/T long commodities and ¥.

Sat, 05/18/2013 - 17:37 | 3576459 FreeMktFisherMN
FreeMktFisherMN's picture

Agree. How low do you think silver can go (and gold) Yen? I don't see how they could take silver even down to $15 because it would blow up the COMEX, and the coin shop/on the ground buying would be so absurd with premiums. Way too many people would not miss a chance to get on the boat if silver dropped so low as it did in '08. 

As I said on another post, the Comex contract for silver is for 5k ozt, and many people cannot afford that, and gold is for 100 ozt. 

I think the floor in silver has to be around 18-20, and even taking it that low puts ENORMOUS stress on the physical markets. It's well documented how just one cajillionaire could take delivery of Ag on the Comex and destroy the cartel (force majeure would have to happen). It wouldn't even take some crazy thing like the Hunts did.

I think scaling into a long gold/silver/platinum position from right around here and buying on any dips (maybe paying attention to TA to find target areas for where support comes in to get optimal entry price) is the way to go. No way with all this printing and geopolitical red flags all over the place that the PMs keep getting crushed. I have tons of conviction in this.

Sat, 05/18/2013 - 17:39 | 3576464 FreeMktFisherMN
FreeMktFisherMN's picture

I could see (but don't think it will happen) gold getting another few $100s lower here just to get more throwing in the towel, but I think a double bottom with the second leg of the 'W' being shallower and a rocket up is in the works here. 

Sat, 05/18/2013 - 18:13 | 3576508 Yen Cross
Yen Cross's picture

  FreeMktFisherMN  quit playing the devils Advocate.

Sat, 05/18/2013 - 18:40 | 3576556 FreeMktFisherMN
FreeMktFisherMN's picture


Sat, 05/18/2013 - 20:25 | 3576733 Yen Cross
Yen Cross's picture

 It would be foolish, to not be buying silver at these prices.

Sat, 05/18/2013 - 20:43 | 3576766 FreeMktFisherMN
FreeMktFisherMN's picture

Absolutely agree. Beyond its monetary metal status, too, what is alarming is its depletion rate. Have read and watched youtube videos about chemists talking about how awesome a metal it is, and how many uses it may have still unknown. Most of that solar stuff has to use silver, for instance.

The 18-20 range is an absolute bottom in my opinion. Strong chance it won't even get that low, as 1700ish may be the top for the ES. So many people are buying into the 'strong trend line' and whatnot bullish factors, but I just look at the on-the-ground and see unemployment, food stamps, Detroitification, lousy economic data points last week. Initial claims were at 360k, whereas expectations were for 330k. And  I have to laugh at what a farce these economic data points are, because say initial claims came in at 320k, the market would probably love that. Nevermind that 320k is still horrible. Just like EPS and revenue expectations. Just because it 'beat the Street' doesn't mean it wasn't bad anyway!

Sat, 05/18/2013 - 16:19 | 3576332 Vlad Tepid
Vlad Tepid's picture

+100 for the reference to the Nobility of Failure.  Abe is a disgrace.  This is only one of many of his serious strategic blunders.  For the sake of contagion, let's hope Abe lasts only as long as he did the first time around.  Kuroda bears a lot of blame here too...

Sat, 05/18/2013 - 16:19 | 3576333 Blind
Blind's picture

HONG KONG, 18 May, 2013  – The Hong Kong Mercantile Exchange (HKMEx) announces today it has decided to voluntarily surrender the authorisation to provide automated trading services (“ATS”) granted by the Securities and Futures Commission (“the SFC”).

With immediate effect, no new orders may be placed and all open positions will be financially settled at the settlement price determined by HKMEx and its designated clearinghouse.

No physical to deliver? Thank you very much! 

Sat, 05/18/2013 - 16:40 | 3576338 Aurora Ex Machina
Aurora Ex Machina's picture

This is mis-reading Japan. Abe is currently on a one-man (not really, look at comments I made about Chinese claims to Okinawa last week, regarding that Mayor's comments regarding comfort women) mission to deliberately start a trade war in Asia, and hot war if necessary.


If you need that translated, it's the equivalent to Merkel riding a Panzer Tank wearing one of these; (Unit) 731 is not a "mistake". The Chinese and so on were annoyed by some second city mayor mouthing off about comfort women, but this stunt draws in the S. Koreans as well [WSJ]. Prior to all of this, the Chinese <> Japanese trade balances were doing very nicely ($311 billion from memory) and there was a decent chance at peace. Then, suddenly, we have Island disputes over energy and militarism coupled with financial printing. The USA is deliberately unleashing the Dogs of War here, in an effort to muzzle China into imploding before they do, and despite "innocent protestations" by the NYT et al, this has to have approval from the USA, given the military involvement in the region. Look to whoever (BIS, FED, whatever) green lit the recent monetary policies.

The rather darker reading (that you won't see even voiced in the MSM or whispered at the diplomatic bar) is that Japan knows its economy (S. Korea massacring Japan on its traditional tech) and society (remember: ~30% of young male Hikikomori aren't breeding, and that age issue is about to go critical) is now doomed, sacrificed on the altar of being-really-shitty-to-women, xenophobia and social stultification and they're willing to go out in style. They might have realized they've been painted into a corner, and their only response is a massive "Fuck You" before they go out. Feel free to put your odds on that, but I know that I was told: "Have you seen how Japan treats its women? Frankly, we'd prefer it if that society didn't make it".



    nu ni kagiroi
             tatsu miete
Kaerimi sure ba
tsuki katabuki nu


Looking to the east
       we saw the glow of morning
             rising over fields
Then turning to look behind
       the moon was just then setting.


Or, since Daniel has a nice name, so rich in meaning:

Yakumo tatsu
       Izumo yaegaki
             tsumagomi ni
yaegaki tsukuru
       sono yaegaki o


Eight, in numerology, we all know what it means. 


p.s. If you need confirmation of this, the OP's title is from "The Charge of the Light Brigade", the suicide of the pride of the British Empire in the Crimean War; he's already told you they're going out in style, I'm merely using traditional Japanese culture to denote it, rather than his Western referencing. Lazy Daniel, Lazy Lazy Lazy.

Sat, 05/18/2013 - 17:08 | 3576415 Seeking Aphids
Seeking Aphids's picture

Wow...whatever you are smoking, I want some really badly............I agree that the Japanese policy is entirely misguided but suicidal? And they beiieve they are on the way out so why not go with all guns blazing? Come on, Aurora, this is not the real world you are talking about here.....very poetic post, which I enjoyed reading btw, but not entirely accurate - the Charge of the Light Brigade was not really suicidal, just misguided....

Sat, 05/18/2013 - 17:25 | 3576430 Aurora Ex Machina
Aurora Ex Machina's picture

It was based on bad intel, that's the joke. <BOOM TISH TISH>

But no, it really is that bad. High stakes games, the West plays Chess, the East plays Go. Projections for Japan are really that bad in the 20-50 yr time frame, without factoring in the non-economic stuff, and societally Japan cannot change fast enough before the trap snaps closed.


And, for the record, I'm not smoking anything; this is the polite, toned down, keeping-it-real for the monkeys version.



There's a reason computers are good at Chess but crap at Go. It's the real fun part of the world. The solution is not to make the world / people predicatively run like Chess, which is what Corporate Management SpeakTM does. The solution is much more fun; the sad thing is that the monkeys with money won't be able to make the switch before they get eaten.

Sat, 05/18/2013 - 17:56 | 3576484 Stares straight...
Stares straight ahead's picture

Genius and crazy mixed all together, like a bacon and banana milkshake!

Sat, 05/18/2013 - 19:00 | 3576569 Aurora Ex Machina
Aurora Ex Machina's picture

No Japanese person in power will not understand the Tanka cited, you're merely showing your own ignorance.

Both the slayer and the slain
Are like a dewdrop and a flash of lightning
They are thus to be regarded

~Diamond Sutra.


You should consider why that very popular Sutra is not in Google's search history. Erasure of un-wanted history is part of the search world. The source outside the original sutras / translations is a very famous Zen Buddist text, called "The Zen Doctrine of No Mind". It's not some secret. That Google doesn't know it, says it's been purged.


You're in a bubble Neo.


p.s. And yes, the Avatar & reference is cute, we get the English Carry On film reference. But I'm not talking to you. You are blossom drifting down from the tree.

To translate to ZH realms: Do. Not. Fuck. With. Me; You. Are. Way. Out. Of. Your. Comfort. Zone. And. I. Will. Fuck. Your. Shit. Up.



Sat, 05/18/2013 - 19:40 | 3576659 g speed
g speed's picture

I'll bite---what changed the mid set from the rising sun empire to the setting sun rest in peace mind set?  Is this unique in the ruling class or a national thing? Not a jibe, just would like to know more. 

Sat, 05/18/2013 - 20:07 | 3576700 Aurora Ex Machina
Aurora Ex Machina's picture

I presume you meant "mind set". There is no difference, if the dreams of the rising are the same as the reality of the setting.

I understand fully the desires of the Rising Sun mythos, and despite finding their methods rather crude, the ethos is morally good, to a degree. I also know they're looking for the New Sun this year. I also understand why the Moon is part of the dualism you use, since the female gets so badly ignored in all of this. And yes, I understand the music, but I also understand the ability of the predators underneath to rip decent people off for all their wealth due to using the Law and CopyRight.

The bottom line is I no longer trust your ability to change your own species. You have passed the Rubicon, and devolved into petty squabbling with a fractal lens that shows nothing more than petty tit-for-tat all the way down. Too little, too late.

It's not a hard proposition either: the real issue is that you cannot discern Belief from Reality, or more importantly, hold both in a mental space at once. [This is extremely easy btw, it's like being a child, this shouldn't be a problem past the age of 6 or so for the homo sapien mind]. You completely mis-understand what the point of procreation is, and how dependent you are on a social network to spur real growth, language, emotional engagement, empathy and so forth. These have been taken from you by Religion, Branding (advertising), unending work, and so on.

The real answer is simple: You got given 3 years to work out the financial "Economy" and make some changes. You did nothing, didn't change a single iota of the game, and sat scratching your arses looking happy with yourselves while thinking the same game was playing.


Ian Curtis, killed himself this day a while ago. In Memoriam.




I got bored of your shit, burn it all down if you're unable to grow up.



p.s. Loving the Junks - just shows you who is reading. Snakey snakey snakey, heads cut off soon.

Sat, 05/18/2013 - 21:40 | 3576889 Element
Element's picture

nail ... meet hammer


Between the Eyes - Angels

Sat, 05/18/2013 - 22:09 | 3576932 Aurora Ex Machina
Aurora Ex Machina's picture

No, it's more like I blinded myself to give you a chance.

War comes.

Show me another way, we're all wanting a peaceful solution. While waiting, you're scurrying around desperately trying to make sure that war happens.

Seriously: it's hard to walk through the valley of corpses with you all cheering on Waaaaaaaaaaaar and stop it.

This does not end well.



Loving the paid shills here ~ watch the junks, they think it's Reddit, which is cute. They're also using multiple accounts to upvote each other, which kinda works on Reddit, but not here. My response? Who gives a fuck, you've 5 months until it all goes boom anyhow. Oh, and we get the M-I-M edits, cocksuckers.

Being honest: bored of this. No decent responses, all trolls, with junks. ZH, welcome to the mediocre desert of the cunts; and yes, they're paid. Nuke them from Orbit. They're paid cunts. And yes, we spent the time to trace them.



Sat, 05/18/2013 - 22:16 | 3576997 Element
Element's picture

No one needs to cheer-on war for it to occur, haven't you noticed? And to your numbskull accusation/insinuation, you'll never find a single post anywhere on zh where I've encouraged war, but you will find several thousand directed towards the other direction, plus informing people why it would be a very bad idea. But you keep making shit up, and frothing out crap at at people, have fun.

Sat, 05/18/2013 - 22:19 | 3577006 Aurora Ex Machina
Aurora Ex Machina's picture

Actually, that was probably a mistake on my behalf, so I apologize. And, actually, it takes a lot of cheering to get the Western nations to war, that's the point.


Run it through this thread getting trolled, and see the reality.  Pressure - Pressure - Pressure, it's a standard Psyop tactic.

Sat, 05/18/2013 - 22:24 | 3577021 Element
Element's picture

Fine, but what if it were, we're all big kids here. Do you think we're really in any danger of falling for psyop BS? Not very likely I'd say.

Sat, 05/18/2013 - 22:59 | 3577075 Aurora Ex Machina
Aurora Ex Machina's picture

Nah, but it's amusing that they've spent 3 accounts doing it tonight. I am merely lifting my skirts and showing my knickers for them (note the original post that attracted them, please do - that's G R 0 V E BlndBurgEr content ;) )


One of those accounts is 3 years old. Never say they don't plan ahead ;) I'm just burning them out and dancing around to get the fix.M E TA. Fuck them and their Law.


Edit: Notice how they all go silent now. Either they wised up, we got all their details for a more indepth hack or Tyler nuked them from orbit. Doesn't matter:


We know who they are, and there's probably a couple more, but that was a nice flush for game.


As I said, really not in my pay grade, and I'm sadly a predator at heart. NomNomNom.



Sat, 05/18/2013 - 23:05 | 3577128 Element
Element's picture

Well you're assuming a lot there, and you actually don't know any of it. I read your first post, I don't see what the big deal is, but if you make false and/or assumptive accusations, yeah, people are going to wind you up, to see what else you'll do.

(btw it had 6 downs when I looked, not three, are they all psyop accts? obviously not).

Sat, 05/18/2013 - 23:14 | 3577140 Aurora Ex Machina
Aurora Ex Machina's picture

Talk to Tyler. Don't care, I know the data point that got them worried. It's a central point for the Grove discussion. (Look up my Europa WILL  Prevail <<< post. You need to know what that's referencing).

So, meh - am I insane or just trolling? Actually, most of my posts are straight Edged. That's your lead in. Posters here have often called me many rude words, but we never ever ever call people insane. Not even Francis - he gets slagged off, but NEVER gets called insane. It's part of the ethos of ZH that you can voice anything, and it will be taken seriously.


It is EXTREMELY RARE for a ZH poster to suggest insanity, but that was their first attack vector.

That's the tell.


That's part of ZH manners. Note that after 3 years, the first post made is "You're fucking NUTS".



Sat, 05/18/2013 - 23:42 | 3577198 Element
Element's picture

RE crazy comment, actually that commenter gave a backhanded-complement, said you were a mixture, not one thing or the other.

You may take yourself just a wee bit too seriously, if you wish, but don't expect others too - enjoy.

Sat, 05/18/2013 - 23:49 | 3577211 Aurora Ex Machina
Aurora Ex Machina's picture

Read through, there's 3 accounts (one 3 years old) that got made live on a single comment. Normally, we'd have one bored response of "Meh, whatever", and it'd have died. They consistently used language ("Crazy" etc) that 92.4% of ZH threads don't. Analyzing 179 threads, the words "crazy" "insane" and so on are vanishingly small (under 5%). 

I don't take myself seriously, but I sure as shit know what tickles the bells of the secret services and when three paid accounts go live [you really think I'm not running a lot of stuff on this site... yap, surprised I was]. Actually, Gonna throw you in with there. If you're denying it, prove it. Or fuck off. I'm running the posting stats / years / days / hours in the background that proves this, and your response is: "You may take yourself a touch too seriously".

How nice, how polite, how perfectly English, you're a plant.


Nahhh. I can see the data; you're either ignorant or a plant. Wise up or fuck off.



Ciao, muppet. How dare you claim your position.

Sat, 05/18/2013 - 23:59 | 3577222 Element
Element's picture

Actually, you've now pretty much made the case that you're full of it. I don't believe for a second the Tyler's would allow someone to carry on, as you are, on behalf of zh's admin. Plus if you were doing that, you would not be admitting to it, nor threatening anyone etc.

But go ahead, this is funny now.

Sun, 05/19/2013 - 00:07 | 3577240 Aurora Ex Machina
Aurora Ex Machina's picture

Actually, I was just IDing the 5th plant, it was all fans and knicker lace. (took a bit longer, had to log in/out).

Notice how the other three went silent? You are ID'd as the 5th. There's 1 more (2 more if I read this really closely) but you're the 5th.


It's really funny to me, yes. Gotcha! Shouldn't have been so keen Mr. Man. (And please: I was just playing, you really can't ever catch me, you're fucking slow).


What you gonna do, what ya gonna do when we come for you?



Trippy shit, ya?

M E T A -- C R I M E -- C O M I N G -- F O R -- Y O U -- F A I R -- W A R N I N G

Sun, 05/19/2013 - 00:13 | 3577244 Element
Element's picture

LOL  .... eeewww ... heavy!

You need to get out of the basement mate, your lobes are going floppy.

Have a nice day.

Sun, 05/19/2013 - 05:00 | 3577440 falak pema
falak pema's picture

Ever read a book called Q ?

Awesome acount of a running fight all over europe between the catholic Habsburg inquistion and the puritan protestant strain of Orange spy networks in 17th centruy Europe.

westward ho! 

We are in renaissance times and the swords are out! 

Sat, 05/18/2013 - 22:45 | 3577086 freewolf7
freewolf7's picture

Still here?

Obviously brilliant.
Obvious acces to information.
To taunt, to threaten, to inform?
To bully on a blog would be boring.
Why the rage?
If it all changes in five months,
what difference does it make?

Some are trying to awaken,
but the programming has been effective,
and monkeys can only adapt
too new information
a little at a time.

What's the answer?
Let go, give up,
go back to sleep?
Is the "enemy" really here
on ZH?
Just looking for information.
And if ZH is bs,
where is a monkey to go?
I'm open.

Sat, 05/18/2013 - 22:52 | 3577100 Aurora Ex Machina
Aurora Ex Machina's picture



To burn out the ticks.




Partly accomplished. Feel free to post this to them.


And yes, I am absolutely on your side.

Sat, 05/18/2013 - 23:06 | 3577137 freewolf7
freewolf7's picture

"To burn out the ticks."

The ticks are here, on a silly blog?

Wouldn't it be more efficient to
target bigger parasites?

Is a bank too much to ask for?

And again,
what difference
if we've missed
our deadline?

Sat, 05/18/2013 - 23:15 | 3577158 Aurora Ex Machina
Aurora Ex Machina's picture

You would be surprised who reads this tawdry magazine / blog.



Love you to.

Sat, 05/18/2013 - 23:41 | 3577196 freewolf7
freewolf7's picture

Thanks. That was fun.
Saw one on the way to work today.
Since you know everything,
you know I'm no threat.
Burn the ticks
if indeed you are on
my side.
I'll cheer.
My guess is
no one will f*ck
with you here,
as you have access
to absolute data.
Thanks for indulging me.

Sat, 05/18/2013 - 19:55 | 3576686 suteibu
suteibu's picture

Nice attack for no good reason.  Who wouldn't want a bacon and banana milk shake?

Knowledge without wisdom combined with deep narcissism.

However many holy words you read,
However many you speak,
What good will they do you
If you do not act upon them?


Sat, 05/18/2013 - 20:10 | 3576701 Aurora Ex Machina
Aurora Ex Machina's picture

"Crazy" = "no worth" in western terms, it's an obvious slur, especially with the DSM V coming into play wery wery soon.


Nice use of the "Holy Texts" there.


Sadly, you kinda missed the point------------------------------------------------------------------------------------------------------------------------------------------------>



Come, young little flies, come to the honey. Careful of the light, or you'll lose your wings. And yes, I do see who you are.

Sat, 05/18/2013 - 20:11 | 3576713 suteibu
suteibu's picture

Perhaps crazy is "wery" appropriate for you.  I have never been a troll but I have just become yours until you begin to bore me with your arrogance.

Sat, 05/18/2013 - 20:14 | 3576717 Aurora Ex Machina
Aurora Ex Machina's picture

Nah, I know what you're doing. You're worse than the Scientologists, worse than the Mormons.


You're not even smart enough to kiss the toes of /b/ on 4chan.


Hint - should have listened to the song I linked, cunt. I even timed it, launched it to play as I posted, you responded before it finished. Now fuck off. /fail

Sat, 05/18/2013 - 20:23 | 3576730 suteibu
suteibu's picture

Yeah...I'm sticking with crazy...wery, wery crazy.  But the entertainment value is off the charts.

Sat, 05/18/2013 - 20:39 | 3576740 Aurora Ex Machina
Aurora Ex Machina's picture

Then you're an idiot, and know nothing. So far, you've managed to link a Holy Script that isn't relevant with an accusation of arrogance and offered nothing of your own thoughts, and bleat "CRAZY CRAZY IGNORE THIS POSTER CRAZY CRAZY".

If you even want to attempt the crazy charge, do a GREP of my posts. You'll see they're more sane than not. When they're Un-intelligable, there's a reason.

Enjoy your Big Mac and Fries. Oh, and don't think we can't trace your posting history. That's... interesting, little snake. But please, tell me more how crazy I am. Who pays you? I want to know, 'cause they're wasting their money. /b/ says you're a cock. Oh, and btw - only engaging to see the quality of the other side. You're not proving very effective, sowwry. Sad Panda says Amateurs at this are Sad Panda crap at trolling. :( :( :(


Stick to teenagers on Facebook, muppet. Srsly, you're shit at this. The US gov. check you cash probably should involve a peer reviewed feedback service ;) That's you that is.



p.s. Amateur. We eat your kind for breakfast for shits n giggles, now piss off. Go to bed, and feel ashamed, 'cause you ain't making your money.

Sat, 05/18/2013 - 20:40 | 3576757 suteibu
suteibu's picture

“If your opponent is of choleric temper,  seek to irritate him.  Pretend to be weak, that he may grow arrogant.”
? Sun Tzu

Sat, 05/18/2013 - 20:49 | 3576778 Aurora Ex Machina
Aurora Ex Machina's picture

Nah, I'm playing YOU. You don't get it yet, but this is funny.

It's VERY cute you deleted the $136 million funding from Cryptocomb for "Operation Earnest Voice" <oh look, they deleted it, when it showed their funding! Sadly, hush hush, they don't know about archives!] page and all, but we've got it saved. Bottom line: Go away. I know what you are, I know what you're paid, and better techs than me just spent 20 mins on your connection.


Dude, you got made.

Sun, 05/19/2013 - 17:11 | 3578325 trader1
Sat, 05/18/2013 - 21:34 | 3576874 Stares straight...
Stares straight ahead's picture

Well, I meant "crazy"as in, "Crazy like a fox"; sort of a backhanded western compliment... But then I changed my mind after you kept referring to yourself as "we". Now i think you're just plain crazy. (As in putting the miilkshake in your eye.)

Excuse me as I practice a little Shikantaza.

Sat, 05/18/2013 - 21:50 | 3576886 Aurora Ex Machina
Aurora Ex Machina's picture

Sad. You get sutetibu to answer, and then come up with this? Zzzz. And you reference ZaZen?  Nice trolling dude. COOOOOMBOOOO BREEEEAKEER. [Yeah, that only works for kids with memories of fighting games].

>Try answering the content next time, Zen doesn't allow you to ignore the substance of your mind, that's the point. You answer the content, you don't make silly shitty sniping attacks. If you do that, you're not doing Zen Buddhism.


Answer the meat of the post, not just some shitty ad  hominem crap, I might get interested. So, nope, sorry. /troll fail. (And yep.. fuck me. You sure you got different IPs there champ?). But yeah, we already know neither of you come from Japan, so why not drop this pretense you know anything about the culture, ya?




p.s. No-one gives a shit if you get a shadow account to give you a +1 reach-around, this ain't Reddit Marine Propaganda Core.

Sat, 05/18/2013 - 22:19 | 3577008 Stares straight...
Stares straight ahead's picture

I understood Shikantaza to mean to clear one's mind so as to accept learning (or teachings) without pre- (or mis-) conceptions; to empty one's mind so as to fill it with learning. I am not a practitioner of Buddhism, so though I respect its ideals, I certainly don't give a crap about not demonstrating consistency within it.
You are right about two things: I am not Japanese and I learned this in my teenage karate class studying Koei Kan (which translates to "prosper with happiness".)
Again, to be clear, I thought your original comment was excellently thought out and clearly communicated. All posts after that display deep insecurities, a certain immaturity and a definite non-Buddhist tone. Also a certain paranoia. And as a logical western conclusion, a certain hypocritical-ness.
ps I didn't up or down arrow anyone including myself. I only have one account on ZH, and I practice levity to keep from going crazy. Perhaps you should try it?

Sat, 05/18/2013 - 22:27 | 3577034 Aurora Ex Machina
Aurora Ex Machina's picture

Nah, -10. Poorly argued, no real content, didn't address the original points about Japan, and nothing new barring insults / calls to the crazy.

I really can't be bothered to rip you apart, since you've had no post with content. You've not actually put any content forward, you're just dribbling with generalized nebulous content vaguely related to the original post with some feeling, but making sure it comes back to "INSANITY".

It's a very obvious tactic, and we see it all the time. YOU ARE REALLY NOT IN MY PAY GRADE, but keep on going boy.

Bored now. But feel free to post a response before you've even opened up the link, that's a tell.





They really aren't paying you enough. If you want a hint, we're noting your language structure and responses. :)

Sat, 05/18/2013 - 22:29 | 3577044 Stares straight...
Stares straight ahead's picture

The link was a non sequitur. Again, a demonstration of hypocrisy.

Sat, 05/18/2013 - 22:34 | 3577050 Aurora Ex Machina
Aurora Ex Machina's picture

LOL nope.


Here's the tell, and it's been amusing us for the last hour.




Name me one other long term ZH poster who brags about their real life as a "martial artist" or whatever? There's two, and they've earned that right through time, being cool and can post pictures. You guys? Nope, nope, nope.





You're a joke, now piss off. We're just playing with you, you absolute pathetic wankers. We know you're linked, we know your IPs and I'm just fucking with you.



Now piss off. p.s. We love the fact you have three accounts you're junking with, it's SO PROFESSIONAL.

Sat, 05/18/2013 - 22:36 | 3577062 Stares straight...
Stares straight ahead's picture

Careful, I'm watching you thru your monitor and taking notes! This is all going on your permanent file.

Sat, 05/18/2013 - 22:37 | 3577064 Aurora Ex Machina
Aurora Ex Machina's picture




Sat, 05/18/2013 - 23:01 | 3577125 suteibu
suteibu's picture

You've been at this for almost 3 hours.  I will give it to you that are persistent if nothing else.

Maybe I should try this...Eta Kooram Nah Smekh

Sat, 05/18/2013 - 23:28 | 3577176 Aurora Ex Machina
Aurora Ex Machina's picture

No. we're just purging the first line paid military accounts.


Thank you for playing, Bai.


p.s. Fuck me, I thought military systems would be harder to get into. This shit is so mundane. Better change that weather intel just for shits and giggles.




[If you fuck with us, you have no idea how badly we can fuck with you. Welcome to your supply depot ordering 1 bog roll and 1,000,000 latex gloves. Fuck me are you guys stupid]

Sat, 05/18/2013 - 22:14 | 3576994 tarsubil
tarsubil's picture

I think he really is completely crazy. Not in a sick way where he needs therapy but in a way where he needs to be in a straight jacket and padded cell.

Sat, 05/18/2013 - 22:20 | 3577009 Aurora Ex Machina
Aurora Ex Machina's picture

Nah, more like: "Oh, look, bleeting sheep who get paid to do this, better run away".



We're tracking it though. You got +2 from your buddies, that's cute :)



Sun, 05/19/2013 - 01:07 | 3577299 Bastiat
Bastiat's picture

You say that the book Zen Doctrine of No Mind is the "source"of the Diamond Sutra?  That book was written by DT Suzuki in the 20th century.  The Diamond Sutra is bit older, actually the oldest extant complete printed book (woodblock, dated 868 CE).

"Diamond Sutra" will get you plenty of hits on Google, though probably not your "quote" which is not in the Diamond Sutra.  No "slayer" or "slain" as I recall though it's been some years since I've read it.

It's unfortunate to throw such things around in an attempt to mystify and self aggrandize.

Sat, 05/18/2013 - 21:06 | 3576815 WAMO556
WAMO556's picture

Perhaps when all the thinking machines are gone, you can teach your fellow humans how to think efficiently. Then all my work will not have been for nothing.

Sun, 05/19/2013 - 00:36 | 3577274 chindit13
chindit13's picture

You started out okay, like a pro golfer who shoots 64 at The Open on Day 1, but then follows it up with a 79 to miss the cut.

Since Clinton (Bill, not Hillary) US influence in Japan has waned.  Maybe it began when Bush I tossed lunch all over Miyazawa, but Japan has been walking its own path for many years, as US focus and concern has shifted to China.  Plus, folks like Ishihara Shintaro are anything but pro US (though more anti-China than anti-US), and it is the Ishihara-types who are on the political rise in Japan (because they are the squeakiest wheels and because they project a message the depressed and disllusioned electorate wants to hear).  The latest mayoral type who made the hideous "comfort women" statement is an Ishihara disciple.  Abe, for his part, has great personal ambitions but lacks the mental and physical fortitude to stay the course.  Remember he stepped down last time because of "excess mental stress".  He is sliding into something between the fanciful and outright bizarre, and doing it absolutely without any US prodding whatsoever.  The US troops represent a false picture of influence, and their continued presence there is partly related to DPRK, part to the ongoing US desire to be able to project power worldwide in a timely manner, and partly because generals want to run something big instead of sitting behind a desk in a bleak Pentagon office (and no C17 or Lear gassed and ready).

Absent the sudden arrival of some cooler heads, Japan is in a death spiral.  They have become the nation that makes everyone feel better about himself, as in "we are really incompetent screw-ups, but at least we're not Japan."  It is astonishing what has happened to them, but also a lesson as to what are the psychic injuries that arise when high expectations are dashed.

Sun, 05/19/2013 - 09:21 | 3577623 Bogdog
Bogdog's picture

Good comments. You can see Japan's behavior prior to and during WWII mirrored in their actions today. They seem to always be looking for the big decisive victory though the underlying facts of the situation, if considered logically, indicate said actions are nothing but suicidal and useless in the end, i.e.,

- the attack on Pearl Harbor

- suicidal bonzai charges defending meaningless islands in the face of overwhelming odds

- the final mission of the battleship Yomato

And so today, we see the endless exponential debasement of their currency, hoping for some "different" result than has been proven so far. Yet, their obvious population bomb, coupled with xenophobia and pride and prejudice dooms them.

It devolves to the substance of national character/dna. The Japanese are predestined to burn out in a flash. And the Germans are giving the marching orders in Europe, yet again. There's a predictability to it.

Sat, 05/18/2013 - 16:22 | 3576341 Jack Burton
Jack Burton's picture

This just confirms that the USA is only in survival mode because of the Dollar reserve currency status. We are different NOT because we have a robust economy, no, we are different because the dollar still is reserve currency. I think the ill effects of QE on the other world economies is driving many to seek a way out of the dollar trap.

Much information over the last couple years shows many nations BRICKS in particular seeking a slow exit from the need for dollars in there mutual trade. Why perto dollars, why all trade in dollars? Other nations see the US riding this reserve currency to a world dominant postion, when our sick economy does not justify our status in the world anymore.

Watch for the pull back from dollar's status. Lots of nations are signing agreements to bypass the dollar in their trade. Why would they stick with having to soak up all these printed dollars? They are catching on to the game, in which THEY lose, the USA wins. Meanwhile more and more industry and services slip quietly offshore and corporations are now doing much of their work and their corporate finances off shore.

This dollar reserve currency status is vulnerable. Lose it, the US loses much, if not everything.

Sun, 05/19/2013 - 05:59 | 3577455 css1971
css1971's picture

The reserve currency is a two edged blade. There are benefits; you get to tax the world, you get stuff effectively for free. There are problems. It makes you expensive, the constant demand for dollars means they have to print huge amounts to preven deflation. American workers become very expensive and it's much cheaoper to hire Chinese instead.

So you printed shit loads of dollars... What do you do with them? Well, you spend it on a fucking huge military, you spend it on vested interests, so you get this huge corruption of the political system and politicians think they can spend without consequence. Which they largely can, until you lose reserve currency status. Then the shit well and truly hits the fan... for a while. Course with reduced demand for dollars it becomes a weak currency, Americans become cheap... Production comes back to the US.

Sun, 05/19/2013 - 14:26 | 3578061 yatikto
yatikto's picture

not sure, about survival mode.  Offense is a best defense, that's how I would describe it.  US will not go down quietly, that's just the nature of the beasts.

China and Japan had a trade agreement several years ago, and look where they are now. Whether is a fault of US, I am not sure; Japan has been known as a barking little dog.


Sat, 05/18/2013 - 16:31 | 3576348 Pasadena Phil
Pasadena Phil's picture

You left out that the yen in cash form is not the preferred currency for the international narco and international arms running trades. Laundering the dirty yen accumulations by the Japan's "never too big to fail" banks will never pay like it has for the US TBTF banks and unregulated real estate industry.

Sat, 05/18/2013 - 16:31 | 3576350 Zola
Zola's picture

Yawn. The FED will just open a swap line and/or buy JPY in exchange for USD. It's all about CONfidence don't you know ??? We can't have anything derail the "recovery" can't we? Nothing the print button can't solve!!

Sat, 05/18/2013 - 16:45 | 3576366 TrustWho
TrustWho's picture

Confidence is built on faith, trust and history. Recent destructive history will soon destroy confidence, and the YEN collapse will destroy confidence as knees are already showing signs of weakness!

Sat, 05/18/2013 - 16:53 | 3576386 Yen Cross
Yen Cross's picture
  1.      CON-fidence is what a banker wants it to be.  Passbooks are Passe'<
Sat, 05/18/2013 - 16:56 | 3576393 Helvetico
Helvetico's picture

Great piece. Too bad there aren't more responses arguing against Cloud's thesis, which is remarkably frightening.

Sat, 05/18/2013 - 17:07 | 3576408 Aurora Ex Machina
Aurora Ex Machina's picture

There's no dissent because most people know Japan is fucked, including Kyle, who is betting against it heavily.


Not exactly going to draw the "nay sayers" from a ZH crowd, is it?

Sat, 05/18/2013 - 17:22 | 3576435 Yen Cross
Yen Cross's picture

  Japan is fucked. The "death throws" will kill you prematurely...

Sat, 05/18/2013 - 17:51 | 3576478 Aurora Ex Machina
Aurora Ex Machina's picture

To comment here, one has to be neutral, at least for my kind.


Thus, I have no skin in the game.

Do NOT follow this link or you will be banned from the site!