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When Hyman Minsky Runs For The Hills: Japan Central Bank To "Own" 100% Of GDP In 5 Years
Over a year ago, in "Japan's WTF Chart" we showed where Japan lies on the sovereign debt-to-tax revenue continuum. The "where", with a WTF-inducing 1900% sovereign debt/revenue, was essentially off the chart as it was nearly 5 times greater than the first runner up: Greece, with 400%. Naturally, that ratio is absolutely unsustainable and the second rates begin creeping higher, all bets are off, however the day of reckoning could be delayed if as we said two years before Japan's berserko QE was unveiled, the BOJ entered "hyprintspeed" and started monetizing debt at a pace that would make Hyman Minsky and Rudy von Havenstein both break out in a lunatic cackle.
One look at the chart below, which shows JPM's estimate for various central bank holdings as a percent of host nation GDP, is enough to explain why that distant giggling is Hyman Minsky warming up... and he is running for the hills.
The reason: while as a result of its recent decision to double its monetary base in (every) two years Japan's central bank now holds about 40% of local GDP on its books, it has precommited to seeing this percentage hit 60% over the next two years. But that's jst the beginning.
As JPM's Mike Cembalest points out, the "contingent" line is where the BOJ's asset holdings as a % of GDP will rise to should Japan's 2% inflation goal prove elusive. Did we say "contingent" - we meant definite. And as the line shows, the Bank of Japan will, for the first time in history, "own" all of Japan's GDP on its balance sheet some time in 2018 when its "assets" as a percentage of GDP surpass 100%, and then proceed in linear fashion to add about 10% of GDP to its balance sheet with every passing year until everything inevitably comes crashing down.
What is most ironic here is that we still have assorted carnival barkers and trolling nobel prize winning op-ed writers working for cash burning media outlets, bitching and moaning about the 90% "unsustainable threshold" level of sovereign debt to GDP. Um, standalone sovereign debt in a world with central banks means nothing.
A far more important question is what happens in a world in which the first official sovereign LBO by a central bank of a sovereign nation (remember those fringe bloggers who said in 2009 the
Fed will keep failing up in its central-planning attempts to "fix" the
economy, and whose ridiculed opinions are now mainstream views?... We
do) is not just a mere conspiracy theory but just the lastest conspiracy fact.
So just what do Reinhort and Rogoff, or anyone else for that matter with 2 functioning neurons to rub together, think about a world in which a nation's central bank owns more assets, and has thus created more cash and reserves, than all the good and services for its host nation, which it has then effectively LBOed... with debt created out of thin air and collateralized by what can only be defined as funny money.
We can't wait to find out, and neither can the aforementioned Mr. Minsky, who if not running for the hills, is certainly spinning in his grave.
* * *
Some more thoughts on that absolute, circus-like clusterfuck with zero regard for the future that is happening in a very irradiated Japan, which at this point knows quite well it's game over.
I saw the chart above on Japan’s balance sheet compared to the Fed and ECB in a research report from J.P. Morgan Securities last week (their October 11th Global Data Watch). One segment of the line on the chart shows what Japan has already committed to, and another segment showing where its balance sheet might go (“contingent”) if inflation expectations do not rise to the government’s 2% target in time. Japan’s planned massive increase in Central Bank holdings of government bonds looked huge and almost unnatural, like a picture I saw this week of a giant 20-foot oarfish discovered off Catalina Island. But this is exactly what Japan plans to do: liquefy the Japanese economy to the point where inflation expectations rise, and where owners of Japanese government bonds decide that real yields are so low that they either (a) buy riskier domestic assets, or (b) any foreign asset, which would weaken the Yen and presumably contribute to an export-led recovery. To propel more of (a), Japan is considering the creation of new investment accounts which allow citizens to contribute money whose subsequent gains are untaxed, but only if they are invested in equities (not bonds, cash or gold). Amazing.
Yup: the proverbial Bernanke chopper warming up now, somewhere in Tokyo.
Such a strategy is not riskless, of course. One I can think of: if the Yen collapses and oil/natural gas prices remain high, Japanese energy import costs may become intolerably high and threaten any recovery. All the more reason that Japan is going to be under increasing pressure to re-commission nuclear power, even as the situation in Fukushima deteriorates further. For a couple of decades, being underweight Japanese equities was a very reliable thing to do. For now, owning a normal allocation seems like the best course of action, as long as the Yen exposure can be hedged. Another rise in Japanese equities is going to be easier to engineer than a durable, consistent increase in Japanese growth and inflation; these are two very different things.
Since we've said all of this before, and frankly are tired of repeating ourselves, the only thing that needs clarification is what a 20-foot oarfish looks like. Here is the answer.
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Why worry.. Kim Kardashian posted her vag or some such on some social media self flagellation site yesterday so you got that going for ya..
The three most powerful forces in the Universe.
1.) As per Einstein, the power of compound interest. Just think of all the money the BoJ is gonna owe to them selves. Wow!
2.) What could go wrong with a buncha politicos and central bankers being owned 100% by the bankers, owning 100% of a country?
Wow!
3.) Add the first two in with KK's snortch and ya' got a winner.
Booyah!
The Careless Whisper News Update & Threadjacking
Two Convicted Killers Use Bank Of America/JPMorgan/Wells Fargo Scheme To Escape Prison; Walk Out Front Door Using Forged Court Documents; Linda Green Is Now A Judge?
http://www.washingtonpost.com/national/2-fla-murder-convicts-mistakenly-...
Just a question....how many years can ZH call the top?
Like the Fed, as many years as it takes!
Who cares, as long as the S&P goes higher vs. Who cares, as long as football is still on the boob tube.
Hyman Minsky? Is related of Scrotum Minsky?
Gold is Equity in the SDR IPO of the next Global Financial System
http://twoshortplanksunplugged.blogspot.com.au/2013/10/gold-is-equity-in-sdr-ipo.html
Its certainly is the age of acquire-us
Good one....
Why wouldnt they just put a bid on everything (and i think they will)? Sounds like a 'soft' confiscation to me.
And by the way this type of confiscation is much more efficient than it used to be as something real and useful is exchanged to bits in a cloud.
getcha popcorn ready...non GMO of course
Did you know popcorn is very high in fibre.
Does not parse...
Maximum allowable safe levels of debt to GDP have been raised...fukustyle
Fukkuppy, the logo for the Japan Central Bank. Works for me.
Is Japan’s currency future that of the Soviet ruble?
“The economy of the Soviet Union was a government-controlled planned economy, where the government controlled prices and the exchange of currency. Thus, its role was unlike that of a currency in a market economy, because distribution of goods was controlled by other mechanisms than currency, such as centrally planned quotas, queuing or blat. Only a limited set of products could be freely bought, thus the ruble had a role similar to trading stamps or food stamps. The currency was not internationally exchangeable and its export was illegal. The sudden transformation from a Soviet "non-currency" into a market currency contributed to the economic hardship following the collapse of the Soviet planned economy.” -- Wikipedia
+ on that, JR. That's where it all ends up, most everywhere. When the Central Banks own it all, they control it all, including prices. The problem isn't that it won't work. It's that it won't work for 60 years.
And just for the record, Jimmy Carter was never in command of a nuclear submarine. Barack Obama was never a Professor of Constitutional Law.
As for myself, I haven't done either, either, so there.
Now back to your regularly scheduled madness.
For the correct record, Jimmy Carter was a NUCLEAR ENGINEER. O'Bummer was a student. Jimmy Carter very smart, O'Bummer not so much. I think your comment was a bit disingenuous.
But it is the most simple of all.... the truth
Did you not ever notice that the Democrats and their fawning propaganda media machine claimed both to be true, though?
Just sayin'...
BTW, I have been accused of dis-ingenuity times previous, in particular a number of transactions where I sat across the table from Goldilocks. They wanted the world in docs which I put a stop to pure clean and simple with one measly paragraph (not withstanding anything to the foregoing, etc) close to the signatory lines. They initially objected, but alas and alack, they'd made promises they had to keep, in writing, at the last moment to make the deals work. It's not terribly hard to bind a narcissist when one's given them ample rope.
Knuckles makes good posts for pro.
Or an insto or a man with just too much time....
Sometimes the Forrest has a good smell my man..
Japan's lost decade is about to turn into a lost century.
Just lost.
Lost decade X 3
I'm thinking more of a mobius strip where it is impossible to figure out who owns anything. All lines of ownership rehypothecate through all other lines, thus evaporating and everyone owns everything or no one owns anything. They will chase these lines trying to figure it out, never realizing that they are dying of radiation poisoning.
Indeed. Oh, and maybe some one who can break through to the Communist Californians, should tell them that there is a possibility that the Fukishima thing may not play out too well, and may adversely effect their environment a little more than those lead bullets they just banned.
Some videos btw 15-17 October show an 18-feet oarfish in Cali. Won't mean a lot, I think, at least no earthquake.
Latest big oarfish arrivals were 2007, 1996, 1987..
Lots of sightings in 2010, one in June 2013....
Z/Hs' brightest bulbs "coalesce" and fail to insight vigor? The story of the Republican party...
The time is ripe for a third Libertarian party!
"The time is ripe for a third Libertarian party!"
I'm there, YC. But let's make it a Voluntaryist organization, not some extension of the Cato GOP.
"The time is ripe for a third Libertarian party!"
We don't need 3 Libertarian parties. Not at first anyway...
We can't call it the "Libertarian Party 2" - as that's been around for many years. The name needs to resonate with the masses somehow. The Independents or The Party of the Free, but whatever it's called it needs to feature independence from debt based money through close statutory observation and enforcement of the non-debt money supply (perhaps pegged again to gold.)
If Japan can get away with this, then I will start practising on how to lift myself up in the air by pulling up my own feet.
bootstraps boy. i knows you ain't know ngger. hundreds of years. pulls youself up bootstraps. you gonna do it.
Thats a big oarfish
Can use it to row the sinking USS AmeriKa when it starts sinking faster..
But this time its different they told us...
And where the hell is Helicopter Ben to rescue Abe???
The FED...exporting inflation to the global community for 100 years!
What a legacy......
They've done it so slowly (clever counterfeiting) they've not had significant opposition, but as this heads into the end game we're seeing more and more direct opposition to the USD hegemony.
Japan multibillion dollar idea...multigeneration-sea water glow sticks!
2oz of fuckyouandeveyoneintheworld reactor water in a plastic stick...
-Lasts multiple generations...hand em down to your mutant descendents
-Buy once and fuggetaboutit
Poor fish.
They still haven't tried giving $3 Million tax free to each person; we deserve it.
Japan is the US fed's grand printing experiment.
Hey, US just cought a bigger oarfish; once mr. Yellen gets stretched.
Not the same species, Mr. yellen is a whorefish.
In Japan, it has three eyes, in the US just one. Fukushima versus the pyramid. The EU is blind. China is watching.
Of course, these things are the "logical" result of the fundamental structure of financial systems based on legalized lies, backed by legalized violence! Since everything is based upon systematic force backed frauds, where making "money" out of nothing is a special privilege of a few, which everyone else has no way to avoid, THERE CAN BE NOTHING ELSE THAN RUNAWAY SOCIAL INSANITIES, WHERE THOSE WHO CAN LEGALLY MAKE "MONEY" OUT OF NOTHING MUST END UP OWNING EVERYTHING, especially since they can also charge compound interest upon that "money," which they were legally able to make out of nothing, as debts!
Pretty well the whole world is currently trapped inside of that system where the international banksters were able to capture control over governments, in order to PRIVATIZE THE PUBLIC MONEY SUPPLY, as the supreme manifestation of all the other ways that our current systems relentlessly private the profits, while socializing the loses. Therefore, all the good things accumulate in the hands of those doing that, while all the bad things pile up around them, and everyone else, higher and higher.
The established financial accounting systems assert that a few own all the assets, while everybody is diffusely responsible for the liabilities. In that system, "money" actually becomes the residue of destroying the natural capital, because the whole system is based on symbolically being able to make a "big killing," which has run away, far away, to be able to eventually kill almost everything, because those benefiting from that "big killing" keep on getting privately more powerful and wealthy, while everyone actually becomes more and more impoverished ... BUT, the established accounting systems do not show that, while their huge lies continue to be broadcast by the mass media, as a fundamentally fraudulent understanding of the world.
Everything we are doing is based upon the runaway triumphs of deceits, backed by destruction, automatically spiraling around and around to generate greater and greater financial absurdities, SINCE IT IS ALL BASED ON THE RUNAWAY TRIUMPHANT FINANCIAL FRAUD, OF PRIVATIZED ABILITIES TO MAKE "MONEY" OUT OF NOTHING. However, meanwhile, given the degree to which those who have been doing that ALREADY own and control almost everything, there is no way to imagine how any coherent opposition can function within those established systems.
The countries that were most conquered and subservient to the international banksters' systems are the ones that are the most "leading" the way towards whatever eventually happens AFTER the effects of legalized lies, backed by legalized violence, reach some sufficient sort of absurd breaking point, where, despite the abundance of organized violence able to back up those lies, those lies nevertheless have become amplified by so many orders of magnitude that the FACT that they are FRAUDS finally manifests ...
OBVIOUSLY, NOBODY HAS ANY WAY TO KNOW HOW THAT WILL PLAY THOUGH! However, for those who like simplified thought experiments, and test models, for this kind of thing:
http://www.eurekalert.org/pub_releases/2013-10/du-mbm101713.php
But nevertheless, there is no doubt that those who were previously positioned to have been rewarded the most from being dishonest, and backing that up with violence, will surely continue to be able to do more of that. International "trade treaties" continue to lock everyone into the overall insanity of the globalized systems based upon financial frauds, achieved by the best organized gangs of criminals being able to apply the methods of organized crime to control the world.
The possible longer term consequences of controlling society with runaway triumphant frauds, along with the deliberate ignorance towards everything outside of the ability to privatize the profits, while socializing the loses, CAN NOT STOP THOSE THINGS FROM HAPPENING.
For one, relatively trivial, but illustrative, contemporary example of that currently happening in Canada:
http://www.liveleak.com/view?i=bff_1382064001
Those who benefited the most from maximizing making their "big killing" in the past have every advantage to continue to force that to happen in the future. That that will probably eventually destroy almost everything, when the socialization of the losses, and destruction of the environment, accumulates to the point where it overwhelms the privatization of the profits. However, the systems of force backed frauds, driven by being able to make money out of nothing, to finance strip-mining the planet, have no apparent ways to be prevented from happening. Therefore, the financial numbers are NUTS, and automatically getting MORE NUTS, while to the degree that the banksters, and their corporations, were able conquer and control the countries doing that demonstrates the degree of social insanity being generally manifested!
Such is the example of Japan, a country which had atomic bombs make it surrender to being dominated by insane financial accounting systems, which would then cause it to act in a way that would bomb itself with atomic power, and now be rushing towards "leading" the way towards the world where runaway triumphant financial frauds loop around and around, to finally strangle themselves!
A great piece, Radical. It reminds me of a statement by Sheldon Emry a few years back on what would happen after the “bubble prick.”
“When the credit/debt bubble is pricked by the bankers,” Emry said, “they will foreclose on America. Then, they will own it all. There may be a ‘managed chaos’—riots and terrorism—to alarm the people with the fear of anarchy as the bankers prepare to impose a dictatorship on America as the ‘solution’ for the problems they, themselves, have created.”
He added: “Only an educated people will be able to resist the lies of the bankers’ stooges. This is why it is important for you to know the truth about how the bankers make billions for themselves and debt to the people.”
Unfortunately, America's youth are now up against the lies in Obama’s new Common Core school curriculum designed by progressives and on which 45 states, the District of Columbia, four U.S. territories, and the Department of Defense Education Activity have all built their educational curriculum.
The program de-emphasizes literature (American culture) in favor of informational texts and government documents in such texts as “Fed Views” by the Federal Reserve Bank of San Francisco (2009) or “Executive Order 13423: Strengthening Federal Environmental Energy, and Transportation Management” published by the General Services Administration.
On the other hand, we have the miracle of the Internet.
The question is, do we love freedom enough to resist the tyranny?
I agree JR. You are probably already familiar with this quote from
http://en.wikipedia.org/wiki/John_Dalberg-Acton,_1st_Baron_Acton
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
For sure, I agree with you that "we have the miracle of the Internet." Although there are clearly efforts to take that over, and shut its freedom down, so far, that has not yet succeeded. Looking at the history of the businesses built around personal computers, and then the Internet, I believe that the established powers did not see that coming, or did not believe it would happen, as much, or as fast, as it actually did. The big corporations that could have controlled it appeared to not imagine its potential, and therefore, allowed a series of amazing little start-up corporations to come out of the garages and basements, to grow to become mega billion dollar enterprises. Although I believe that there was not NOW a really level playing field for those businesses, which continues to exist like it may have when they first started, and none of the major powers appeared to be able to comprehend the magnitude of what was going to actually happen, we are surely still LUCKY to be living near enough to the birth of the personal computer and Internet, so that the original idealism that designed those systems is still mostly still there, and has not yet be sabotaged or completely taken over by the biggest corporations/governmental powers.
As far as whether "we love freedom enough?" ... I do not know. There are much bigger and deeper problems which seem real to me, although they are not fully obvious, or manifesting themselves yet ... For instance, Japan has the following problems more intensely than most other places, since Japan has nowhere close to enough of its own energy resources to keep its industrial system going:
http://ourfiniteworld.com/2013/10/14/two-views-of-our-current-economic-a...
"One thing that the Predominant View misses is the fact that we live in a finite world. This means that growth must at some point slow, and ultimately be reversed. ... Another thing that the Predominant View misses is the fact that energy of the right kinds is absolutely essential for the functioning of the economy. The view that there will be a substitute is more “faith-based” than it is based on objective facts. ... The current Predominant View of our situation is one that puts humans, and in particular current governmental officials, in charge. Historically, governments have had close ties with religion, using religion to further their own purposes. Now, government and religion have almost been fused into one. Perhaps this close tie is the reason why it is so difficult to get a well-reasoned story about our current predicament from those in charge, and why so many people are willing to believe the story we are being told."
THAT IS MY BASIC VIEW: OUR MONETARY SYSTEM HAS BECOME OUR STATE RELIGION, THAT IS THE TYRANNY OF FRAUD, WHICH IS COGNITIVELY DISSONANT TO THE POINT OF INCREASINGLY JARRING ABSURDITY!
In that context, I would repeat the conclusion made in the following article:
http://www.testosteronepit.com/home/2013/10/13/multi-trillion-dollar-question-how-much-of-our-debt-is-odiou.html
... But unless we determine who it is we owe, and for what, and draw a big fat red line through all the debt that has served absolutely no public good, this super cycle of debt deflation will continue to spin faster and faster out of our control. Michael Hudson’s mantra that “Debts that can’t be repaid, won’t be repaid” is the perfect summation of the economic dilemma of our times. And as the Australian economist Steve Keen says, the only sane and effective response to this dilemma is to ask ourselves “not whether we should or should not repay this debt, but how we are going to go about not repaying it.”
Japan merely seems to be one of the first countries into that breach, or going over the top, in the way that the whole world is operating on the basis of ODIOUS DEBTS and the subsequent claims to ownership, based on some people being legally able to make endless "money" out of nothing. Those claims of ownership over resources will become extremely problematic after we have high graded ourselves to hell, and instead of there being more resources to strip-mine, like there was was more petroleum resources to discover and produce, hits real limits. Our state religion money system is the tyranny of absurd frauds. I think that, one way or another, sooner or later, we will be forced to break free of that belief in HUGE LIES, no matter how much violence continues to be used to try to back up those HUGE LIES!
There clearly are efforts to take over the Internet and “shut its freedom down,” as you say Radical.
It’s the Fed money that finances the troika: a corrupt Washington, D.C., the National Security Agency, and Google, i.e., the information monopoly.
The Googleopoly not only uses its data to manipulate elections (the Arizona presidential race), to finance the Democrat Party, to support extensive spy programs on Americans and the rest of the world, but now has abused its search engine capabilities so extensively that almost no Internet user is unaware of its propagandizing by its priority placements of information. Search for background on a Founder, you’ll get slave owner radical sites and even rock groups named after the early Americans before what you sought. Search for Christianity subjects, you’ll get an initial page of atheistic objectors, Jesus deniers, and again a rock group mocking Christianity.
And the list goes on and on and on….
Scott Cleland, President of Precursor LLC --a tech communications research and consulting firm – three years ago gave the following recommendation in his report titled "Googleopoly VI Seeing the Big Picture: How Google is Monopolizing Consumer Internet Media & Threatening a Price Deflationary Spiral & Job Losses in a $Trillion Sector." Here are excerpts:
Recommendation: The facts and stakes warrant the U.S. DOJ filing a Sherman Section 2 Antitrust Case and the EU Filing a Section 102 Statement of Objections – against Google Inc. for monopolizing consumer Internet media services.
Additional Conclusions:
See more at: http://www.netcompetition.org/antitrust/googleopoly-vi-how-google-monopolizes-consumer-internet-media-41-page-powerpoint-presentation#sthash.E2dyw0A2.dpuf
I appreciate all your thoughts, Radical. I chose Google as a case in point because I confront it daily.
Looks like Yellen has a lot of room to operate
Great article. Shows there is no limit to how big a central bank's balance sheet can get.
Such a strategy is not riskless, of course. One I can think of: if the Yen collapses and oil/natural gas prices remain high, Japanese energy import costs may become intolerably high and threaten any recovery.
OK, can we stop this meme too? CB's, like government can't create jobs, can't create prosperity, can't create wealth (in total).
The CB can TRANSFER wealth both to and from different parties, and from the future to present or vice versa, but that's about it.
It is GUARANTEED that any transfer from one party to another will have an equal and opposite effect on the other party.
Don't have to worry about Japan, in 5 years there will be no one left alive. http://enenews.com/sailor-after-we-left-japan-it-felt-as-if-the-ocean-it...
https://www.healthcare.gov
Do it before it's too late.
I thought I saw China window-shopping for new islands recently.
So that's how we lose our Hyman. Slowly at first then all at once...
Oh man, poor Kyle. Is he going to wait them out or fold?
I create better GDP at my house. I don't know what some of it is though.
central banks are government agencies, appointed by the government, who are in turn appointed by the people, for the people, ya de ya da....people are being replaced by robots so can someone buy a robot, have it do work and take the robot earnings and pay tax on it? own ten robots get paid ten wages and live happily ever after?
this is the same paradigm as a central bank
remember, a central bank merely exchanges one form of government debt (cash) for another (government bonds). remember also that the solution is in governments running surpluses or conversely, central banks withdrawing cash by selling government bonds.
don't be fooled that central banks are owned by banks, the banks themselves pay taxes and are therefore, pwned by the state, hence the bailouts, even the TBTF is merely a quibble over having 5 banks being pwned by the state or 100 banks, similarly pwned, once all the Basle IV, Volvker and Vickers rules are put in place. These rules simply make banks a tax device for the governments and allow the banks to engage in bigger and bigger rip-offs of customers in order to pay the tax demanded by the governments (or by the people, for the people ya de ya da)..its all so pointless and circuitous...
central banks borrow money each time they buy government debt, its fiat money, worth only the paper it is printed on...and answers the simple question "what is a zero cooupon perpetual worth?" i.e. how much would you pay someone to never pay you back what you lent and never pay you interest? that is the sleight of hand being employed...that zero coupon perpetual is equivalent to never reducing the amount of government debt on issue..think about it...you can lend money to the government, the government will pay you interest, but come the rollover date, you cant redeem it...
trouble is, people need the government debt to spend in retirement...Japan is leading the way in the failed experiment of QE in central banking, its demographic says that the government will have to spend ever increasing percentages of GDP to fund retirees...first 5%, then 6% , then 7%...you can call these deficits if you like, though I call them paying pensions...over ten years the binomials get very large (5+6+7+8+9+10+11+12+13+14 = 95% of GDP, then a plateau as retirees start dying and those drawing pensions are matched, hmm, perhaps Fukushima is deliberate policy to infect a large swathe of the population with cancner so that pensions dont have to be paid).
sigh
The FED owns 32% of all treasuries so really we're not that far behind. The FED just needs to keep buying MBS and treasuries until it hits 100% owned. Then we can just start this fiasco allover again like Argentina or Brazil.
How the heck has the eCB unwound its balance sheet that fast?
so, if japan prints yens, and buys treasuries with them, driving down the dollar, thus increasing u.s. exports, but japan keeps the yen/dollar close enough to the difference in the cost of shipping from u.s. of a. to china vs the cost of shipping from japan to china, and china grows fast enough, won't this work out well for japan? and screw the euro?
just askin.
:)
Boy, first they steal our steel, then they steal our electronics, then they steal our cars, and now they steal our Bernanke. I think we can all stop working now. The crops will harvest themselves and a new car will be delivered free by federal park rangers to every registered Democrat just two weeks before each presidential election, as long as the central banks print more moolah.
Extra +1 quadrillion coin for the trolling nobel prize winning op-ed writers
I have not seen anyone comment on why Tyler's "LBO" acronym is such a big deal.
My guess is that the banksters of the world will make sure they get payed on all the government bonds they worked so hard to buy. sarc
To do that they will force all governments, (Japan, Euro, US etc) to withdraw funding of govt functions as the interest payment on the debt grows.
The irony is superlative. To "buy" JGB with a stroke of a key pad and then to force the people to pay the interest (and the principal) on it with real sweat and tears.
http://threatjournal.com/archive/tj10192013.html
Large Government Wealth Grab On The Way! Oct 19, 2013 With another stop gap funding bill now in place to reopen the federal government, keep it running until early February and provide the U.S. Treasury (President Obama) unlimited spending authority to drive the nation further into debt, be forewarned there are measures being put in place for the powers that be to further separate you from your hard earned dollars and savings. And it's coming like a freight train.On Wed of this week, the International Monetary Fund, which is controlled by the U.S. and is headquartered at 19th and Pennsylvania in Washington, DC, issued a report (PDF) calling on advanced economies with high debts to "mobilize domestic revenue" and recommends implementing a series of escalating income and consumption taxes which culminates in the direct confiscation of assets.
Further, the report goes on to recommend strategies to shape public opinion, including the use of "perceived equity" (class envy) as a motivation for the policy.
Considering the astronomical debt levels of the U.S. government, there is no realistic solution to the problem except to "extend and pretend" until the something breaks. The only way to extend the spending spree is by increasing revenue. The only way to increase revenue at the levels needed to buy time is by dramatically boosting taxes and/or coming after the few remaining stores of actual accumulated wealth remaining in the country: IRAs, 401Ks and pensions funds, as well as a direct levy on bank deposits. In each instance, the general model will be to replace the funds taken with increasingly worthless government bonds having distant maturity dates.
Such provisions are already in place within the financial sector to support failing banks. Instead of "bailouts", the new tactic, called a "bail-in", will make use of depositor funds to prop up the failing institution. In this instance, depositors will be given shares of stock in the failing bank, just like what happened in Cyprus.
Is it legal? Yes. It only takes actions on the part of Congress or executive actions by the President, both of whom want the money to spend in the first place. Their actions can be shrouded with such excuses as "protecting hard working Americans savings from the evil villains of Wall Street" or the intentional creation of some type of national emergency.
The actual ground work is already being laid to enable this money grab to take place. Over the last few years the USGOV has been forcing foreign banks to reveal the identities of American citizens who are account holders. The result is that it is now painful, if not impossible, for Americans to open bank accounts in many countries (see this and this). The foreign banks do not want the headache.
Closer to home, efforts are now underway to implement "capital controls" and to hamper "capital flight", including banks limiting the size of cash withdrawals and no longer conducting international wire transfers.
Suffice it to say, this is your big warning: If you have an IRA, 401K, home equity, a savings account or any other means of accumulating your savings and family wealth within the U.S. financial system, it is now at serious risk of partial, or potentially even full, confiscation. This happens throughout the world on a regular basis. Do not think for a moment it can not happen here, or that the government or mainstream media will give you some type of a warning.
It is not just the wealthy who are in danger. Truth be told, most of their money has already been wisely moved to select countries in Asia or invested into hard assets as they have seen the writing on Uncle Sugar's wall for some time. It is the average American who will be hurt most by what is coming.
Now is the time act and find a way to exit the system.
Does Alfred E. Newman have a cousin in Toyko?