This page has been archived and commenting is disabled.
Japan is Dropping Hints of a Potential Exit Strategy
The Bank of Japan is now talking about a potential exit strategy.
The Bank of Japan has begun shifting its focus from supporting growth to ways of phasing out its massive stimulus, taking first tentative steps towards a potentially momentous move for the world economy.
Current and former central bankers familiar with internal discussions say an informal debate is under way on how to prepare for an exit from the BOJ's 13-month-old "quantitative and qualitative monetary easing."
The stimulus is a centerpiece of Prime Minister Shinzo Abe's campaign to end two decades of deflation and fitful growth, and BOJ Governor Haruhiko Kuroda has vowed to keep cheap cash flowing until his 2 percent inflation target is in plain sight.
http://www.reuters.com/article/2014/05/26/us-japan-economy-boj-insight-idUSBREA4P0HZ20140526
The above information is of major import to the globe. Previously we’ve commented that, from a monetary standpoint, the world can be seen as a giant see-saw with the Fed on one end (in tightening mode) and the ECB on the other end (pushing to start QE). Up until this week, the Bank of Japan was in the middle.
It is now moving towards the Fed’s side of the seesaw.
This is a tectonic shift. we’ve noted before on these pages how the Bank of Japan is “ground zero” for the Keynesian lunacy that dominates Central Bank thinking. That thinking, in its simplest form, believes that “printing money will generate growth.”
Japan has now found this belief to be false. As noted before, Japan’s $1.4 trillion QE program, announced April 2013, was the single largest monetary program in modern history: a Central Bank announcing it would print an amount of money equal to over 24% of the country’s GDP.
Since announcing this program, Japan has seen only two quarters of accelerated GDP growth… hardly cause for celebration. Many commentators are claiming Japan has grown more than this due to the rapid growth in the first quarter of 2014. However, this growth was largely due to companies and consumers going on a spending spree before Japan instituted a sales tax increase on April 1.
The one thing this program did accomplish was a serious devaluation of the Japanese Yen. Between Japanese Prime Minister Shinzo Abe’s verbal interventions and the Bank of Japan’s QE policy, the Yen has lost 25% of its value since mid-2012.
This devaluation was intended to boost Japanese exports. The only problem is that it’s also unleashed inflation. In some ways, this was the intended goal (both Shinzo Abe and the Bank of Japan are targeting 2% inflation). However, inflation, once unleashed, can rapidly become a real problem.
On that note, Japan’s official inflation data is already at 1.3%. However, this excludes fresh food. And Japan’s Corporate Service Price Index rose 3.4% in April, well above the expected 3.2%. Inflation is seeping into Japan’s economy.
Indeed, the Bank of Japan’s Board is now showing increasing dissent.
Three of the Bank of Japan's nine board members wanted to separately revise growth and inflation outlooks, including emphasizing downside risks and setting a timeframe for easing, minutes of the April 30 policy meeting released Monday showed.
Bank of Japan minutes show varied dissent on 2% inflation target, growth BoJ minutes show dissent… Takahide Kiuchi and Takehiro Sato repeated objections to the outlook that inflation will be raised to and anchored around 2% in 2015.
Sato said that inflation "is likely to follow a rising trend again from the second half of this fiscal year."
Weak GDP growth with major currency devaluation? This is called stagflation. And it’s causing the Bank of Japan some doubt.
This concludes this article. If you’re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled Protect Your Portfolio at http://phoenixcapitalmarketing.com/special-reports.html
This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.
Best Regards
Phoenix Capital Research
- advertisements -
The Fed is not in tightening mode... that would be when they started mopping up the excess liquidity as promised by Greenspan and Bernanke. The rate of QE has slowed over the last year, but liquidity is still being added albeit at a lower rate.
The word "Tapering" is meant to give the sheeple the same warm fuzzies as the term "deficit reduction"... as if there was any meaningful change in debt or monetary creation levels.
Japan's Exit Strategy = DEFAULT
Sorry, too rational.
The usual choice... hyperinflation.
The entire world has an exit strategy -- replace the Ponzi scheme we call fractional reserve fiat currencies with gold coins, leaf and aurum issued by the world's treasuries from gold allocated for the benefit of mankind in the Global Debt Facility: https://s3.amazonaws.com/khudes/GoldOutofHiding1.pdf
Here is what is allocated to Japan: https://www.youtube.com/watch?v=npdbrah2jQY
The likelihood that this solution occurs is over 90% based on this power transition model:
http://philosophyofmetrics.com/2014/02/18/sdrs-and-the-new-bretton-woods...
After the Banking Cartel tried to nuke Charleston on October 7, 2013, the US military was not going to go down the Banking Cartel path any more: https://s3.amazonaws.com/khudes/Twitter6.18.14.pdf
For a recent discussion, see my interview with Greek Voice TV https://www.youtube.com/watch?v=gMY1fw7fpcM
https://www.youtube.com/watch?v=npdbrah2jQY
To this day, I still just cannot fathom modern man's acceptance of central banking as if it's as normal as takin' a piss. The enslaved hate their masters, then depend on them, then find a bizarre way to love them. By then they no longer refer to them as masters and hate the slaves who are of a mind to go free, with all the risks and danger associated with it. I'll take the risk thankyouverymuch. "Anyone who would trade a little freedom for a little security deserves neither and will lose both"
Fuck, yeah.
Wow, 3.7! I think this is Phoenix Capital Research's highest ranked article, to date! Congrasts Ghrahmahmhs!
An analog and a possible pathway for Nikkei
http://goldenopportunitytrading.blogspot.co.uk/2014/04/is-nikkei-ready-f...
I like the thinking that they can anchor interest rates at 2%.
They appear to have such great control over them before...
It's fine (All markets are up near or at recoed highs)
It's fine (All markets are up near or at recoed highs)
It's Fine
exit strategy - pretend there is an exit strategy. sit, wait for it all to unwind.
Like any "hangover". The longer and more you been doin' it the longer it takes to feel "normal"
Hahhahaahhahahhhaaaaaaaaaaaaa fuck
LOL what is funny is the comparison of Europe, US and Japan CB policy. US is the most hawkish while still printing, I'm losing track, is it $35 billion a month, and maintaining a $4 + trillion balance sheet.
"Weak GDP growth with major currency devaluation? This is called stagflation."
Saying something doesn't make it true.
Emitting unbacked credit/currency = currency evaluation = inflation.
The accounting gimmicks labelled 'GDP' and 'growth' have nothing to do with unbacked currency emissions aka inflation whatsoever.
Currency devaluation = theft.
Theft.
Theft of savings. Theft of agreed interest due on savings.
Theft of wages. Theft of agreed future wages.
Theft of pending/invoiced payments. Theft of profits.
It is even a theft of tax receipts.
Theft.
Theft in a big way. By my math, their Y0Y oil costs are up around 45%. No wonder the fools at the CB are having second thoughts.
No quantity of adjectives or adverbs of the hyperbolic type can reasonably describe (accurately) the level of arrogance/stupidity/stubbornness of the Japanese culture - they deserve whatever rotten, painful result they can inflict on themselves. They are poisoning our earth's oceans and thus all of us.
Some commentators remark there is no solution/fix available to the radioactive contamination into the ocean(s), and the Japs don't even talk about it openly amongst themselves. There is no English word to displayu maximum disgust of othres. There is only.....
It ought to be legal to eliminate them - until they start to fix it or die trying.
How much did they spend bailing out TEPCO? How much have they spent on cleaning up Fukushima.
Repeat after me folks: "Nuclear power is the cheapest energy on the planet if someone else pays for the cleanup. If not, there will be no planet in 300 years"
Planet will still be there. With us or without us is the question.
I agree with you on the 300 years.
they destroyed us all.
Inflation is less of a worry for Japan than government default ... if interest rates rise they will print, simple as that.
Well, that's nice because the world's energy providers will be significantly increasing the price of oil, natural gas, and coal. Good luck Japan.
Money can be created out of thin air, but things, especially wealth-produucing things cannot. Keynesians, who do not have faith in the free market, have faith in their ability to create a mirage of wealth that tricks people into deploying their ever-declining economic resources in ways that will create more resoruces. This is exactly what vonMises means by the term "mal-investment". Mal-invested assets may produce a net profit, but never as much as well invested assets will.
But mal-investment is much better at producing profits for the 'right people'.
Casinos full of rich foreign tourists:
http://www.bloomberg.com/news/2014-06-24/abe-says-ldp-aiming-to-pass-jap...
Casino-Economy?
All is well. Please do not worry.
Max, ...press the reset button.
(comes to mind)
Japan government debt to GDP is 250%. It didn't get there overnight!
Don't worry, we can catch them!
Sooooo That weak yen buys you lots of oil to replace that shut-down nuclear power. And it doesn't wind up in the cost
of near everything else? How's that working out for ya?
Japan continues to slide towards an economic abyss with each passing day. The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency. This means paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world.
The moment the Japaneses stock market fails to rise enough to offset inflation this will turn into a tsunami of money fleeing Japan and constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html
-1 for unrelenting pimping of your blog on ZH. Enough already.
exactly. but due to whatever reason, phoenix c.r. takes some crooked central bankers' words at face value. go figure.