The Japanification Of Europe

Tyler Durden's picture


According to the 1990s Japan script, European QE is just what the doctor ordered to raise growth and inflation expectations... oh wait...


Presenting the Japanification of Europe...


As a gentle reminder - Japan QE1 began March 2001... The Nikkei 225 fell 62% in the ensuing 2 years


h/t @Schuldensuehner

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 08/25/2014 - 14:47 | 5141397 dirtyfiles
dirtyfiles's picture


Mon, 08/25/2014 - 14:48 | 5141401 Publicus
Publicus's picture

Nothing a little Ebola won't solve.

Mon, 08/25/2014 - 15:10 | 5141488 max2205
max2205's picture

Been waiting....

Mon, 08/25/2014 - 15:14 | 5141516 knukles
knukles's picture

Sheesh!  I been posting about this for almost 5 years, now.
He left out the US's Japanifucaiton, BTW.
Same all over.
Liquidity Trap.

Mon, 08/25/2014 - 15:57 | 5141736 Hippocratic Oaf
Hippocratic Oaf's picture

I'm certainly feeling japanese up in here

Bonds are waaaaaaaaaaay too expensive, even junk

Mon, 08/25/2014 - 15:59 | 5141743 Hippocratic Oaf
Hippocratic Oaf's picture


Mon, 08/25/2014 - 14:52 | 5141403 JustObserving
JustObserving's picture
The Japanification Of Europe

Europe has tiny penises now? Or a penchant for dirty comics? Or Europe has become polite and punctual?

Mon, 08/25/2014 - 14:56 | 5141426 Oldwood
Oldwood's picture

Its pretty damned obvious that Japan's economic policies have failed compared to any measure except for their continued existence, and I believe that existence has only persisted because of the continuity and strong nationalistic nature of its citizens. I see no other country or economic "group" that can touch that level of willingness to sacrifice for their collective good. Japan represents the best case scenario for these policy's outcome. The rest of the world will surely perish trying to replicate it. But that will not stop them from trying as they really don't care what the outcome is, as long as they are still on top and in control. The fact that Japan has done it and is still with us is all the proof they need.

edit to the above, the one exception would be Russia, the one country we are officially trying to crush. So much for picking your battles wisely.

Mon, 08/25/2014 - 16:05 | 5141779 disabledvet
disabledvet's picture

So if Europe is the New Japan what is Japan?

Mon, 08/25/2014 - 16:32 | 5141910 GooseShtepping Moron
GooseShtepping Moron's picture

The new North Korea. Japan has one option for a peaceful, autonomous continued existence: Unplug from the global economy and from the modern, energy-intensive lifestyle while still maintaining enough of a boutique industrial and technological sector to supply them with a small nuclear arsenal and some other modern weapons. If they turn back the page to the Tokugawa period, they will find a workable plan for national survival. It's part of their own historical and cultural experience, it has worked before, and many of them want it anyway. It seems like a pretty good idea given the options.

Mon, 08/25/2014 - 17:45 | 5142211 Notsobadwlad
Notsobadwlad's picture

Japanese economic policy was doing great until Abe. It is the overall banking system and growth paradigm that are flawed.

Japan had to deal with an aging population that needed to be seen through retirement and industrial competition from slave labor countries. They had been doing so marvelously.

The main flaw in Japan was that it was a compliant toy of the Fed, creating excess money to buy unreasonable amounts of foreign debt. I suspect Japan realized this, balked, was Fukashima'd and then executed Abenomics as a sign of contrition... economic Seppuku.

Mon, 08/25/2014 - 15:05 | 5141462 sodbuster
sodbuster's picture

Think- Euro Bakkake!!!

Mon, 08/25/2014 - 14:49 | 5141405 RiskyBidness
RiskyBidness's picture

Moar fuckin QE!!  Come on BTFD!!

Mon, 08/25/2014 - 15:13 | 5141503 Sudden Debt
Sudden Debt's picture

And over here they compaire it to the successes of what they did in America :)
Most morons here actually think Aerica is fully recovered...

Mon, 08/25/2014 - 14:51 | 5141409 ...out of space
...out of space's picture

but qe didnt help usa not japan why it will help eu?

Mon, 08/25/2014 - 15:04 | 5141429 remain calm
remain calm's picture

Because that is all CB's have to offer. So that is all you are going to get until ithe system implodes. CNBC and the rest of media doesn't challenge the merits or question the historical value of QE, and the vast people are too stupid to understand so until we have an event that precipitates the avalache everything is good. Got it?

Mon, 08/25/2014 - 15:07 | 5141476 ...out of space
...out of space's picture

actul no. why the fuck the cb  will even try to fix the this/old economy if the new monetary sistem in on horizont. BRICS will involve west in this event. so smart move for the west will be to position them self for that. you know nothing last forever.

Mon, 08/25/2014 - 15:13 | 5141502 NOTaREALmerican
NOTaREALmerican's picture

Re: if the new monetary sistem in on horizont

Nothing is certain.

Mon, 08/25/2014 - 16:01 | 5141758 Hippocratic Oaf
Hippocratic Oaf's picture

Another thing CNBS fails to acknowledge is P/E Ratio.


Mon, 08/25/2014 - 14:50 | 5141411 NOTaREALmerican
NOTaREALmerican's picture

Well,  come on,  if you don't try it how will you know for sure it won't work.

Try it.   A little QE never hurt anybody.   Come on.    Don't be a pussy, try it.

Mon, 08/25/2014 - 15:11 | 5141498 Sudden Debt
Sudden Debt's picture

If you didn't try the same thing 20 times in a row, you didn't really give it a shot now do you?

Mon, 08/25/2014 - 15:13 | 5141510 ...out of space
...out of space's picture

i did , i try but i got charge of counterfeit

Mon, 08/25/2014 - 14:50 | 5141412 LawsofPhysics
LawsofPhysics's picture

This is being done to the entire western world.  Hooray!  "Risk" has been eliminated!




Mon, 08/25/2014 - 14:53 | 5141417 ThroxxOfVron
ThroxxOfVron's picture



"Wage-setting practices have changed during the prolonged period of deflation. Wages of regular employees tend to reflect labor market conditions only quite slowly,” he said. “Some kind of mechanism, a ‘visible’ hand, is necessary for wages to rise.

Part of such a mechanism is the central bank’s aggressive monetary easing, which includes an indication that it will take all steps necessary to return Japan’s inflation rate back up to 2% after two decades of falling prices and wages.

“The Bank of Japan’s price stability target can serve as a benchmark for firms’ wage setting,” Mr. Kuroda said.


Mr. Kuroda vowed to maintain Japan’s aggressive monetary-policy easing until the country reaches its 2% inflation target, which he said could happen as early as this fiscal year.

Mr. Kuroda said that once inflation starts moving higher, 10-year government bond rates around 0.5% will not be sustainable."


I hardly know where to begin parsing this...


“Some kind of mechanism, a ‘visible’ hand, is necessary for wages to rise.

"once inflation starts moving higher, 10-year government bond rates around 0.5% will not be sustainable."


Um, wow...

Mon, 08/25/2014 - 14:58 | 5141440 LawsofPhysics
LawsofPhysics's picture

"two decades of falling prices" -  really?  what was a gallon of gas a decade ago?  How about a gallon of milk?  a pound of sushi?  rent for a small apartment in tokyo?



Mon, 08/25/2014 - 15:14 | 5141451 Dr. Engali
Dr. Engali's picture

Shhhhhhhhh..... When calculating inflation you're only supposed to count flat screen teevees, iGadgets, and DVD players with an extra button.

Mon, 08/25/2014 - 15:12 | 5141501 Surging Chaos
Surging Chaos's picture

You figure the Japanese would be ones to love falling prices given that Japan is a very expensive country to live in.

Mon, 08/25/2014 - 15:01 | 5141445 centerline
centerline's picture

Japan is one geopolitical event away from going economic kamakazee on itself.

Mon, 08/25/2014 - 15:04 | 5141456 Oldwood
Oldwood's picture

The important thing for all of these idiots is that they are hired to do something and they damned sure will.

Solutions are at hand

They obviously will burn that bridge when they come to it.

Mon, 08/25/2014 - 14:54 | 5141428 gdiamond22
gdiamond22's picture

So you're telling me there's a chance...I read ya, I read ya

Mon, 08/25/2014 - 15:01 | 5141447 Bill of Rights
Bill of Rights's picture
Narrow but definitive win on waiting periods in CA


Mon, 08/25/2014 - 15:09 | 5141457 ThroxxOfVron
ThroxxOfVron's picture


"Japan is the modern laboratory. Governor Kuroda has launched a QE blitz on a scale never seen before to break the deflationary spiral. The Bank of Japan may own government bonds equal 100pc of GDP before long.

The jury is still out on its effects. Inflation has risen to 1.3pc, but seems to have peaked as the one-off effects of a massive devaluation fade. But the experiment has been contaminated. The rise in the consumption tax from 5pc to 8pc has hit the recovery like a sledgehammer. "It was not a bright move. They should have waited until recovery was stronger," said Prof Sims.

"Let us give this another year before we reach a verdict."


The 'exeperiment' was 'contaminated' by ...a tax hike !

Japanese 30 year Government Bonds: 1.63%

BBG JPY Investment Grade Corporate Bond Index effective yield: .38%

Bank Of Japan TOTAL assets:  272,894.40198,973.20 Billion JPY


C'mon Draghi: don't let the Japs WIN.    Debase that E-Mark !

Mon, 08/25/2014 - 15:16 | 5141519 madcows
madcows's picture

If they truly want inflation, then they should just hand out cash to citizens.  This whole QE crap is just a facade for handing money to the banks.

People who don't have money can't pay for higher priced goods.  Making cash available through bank loans in the hopes of creating inflation is retarded.

Mon, 08/25/2014 - 15:27 | 5141539 NOTaREALmerican
NOTaREALmerican's picture

I think over the last 20 years or so, Japan has tried just about about everything to "cause inflation".    If memory serves they tried some sort of consumer coupon that had to be spent on "something" (can't recall now).     I don't think they tried dropping it from helicopters tho.

Mon, 08/25/2014 - 18:42 | 5142432 malek
malek's picture

You can mostly ignore AEP these days, unless you like QE-preaching puppets like Krugman.

He went to the dark side a while ago, likely after he realized that a) telling the truth will not "help" things as there are no good solutions left and/or b) telling the truth will not make him keep his job at the Telegraph for much longer.

Mon, 08/25/2014 - 15:08 | 5141478 Sudden Debt
Sudden Debt's picture

Great... Now all that's missing is our presidents to cry on television to admit they failled but that they'll solve it with more faillures

Mon, 08/25/2014 - 15:18 | 5141532 knukles
knukles's picture

So all we lack's the tears and honesty.
Thank heavens.... now I'll just go, uh... do something or other ... to ah.... make uh.... myself fell better..... I guess.

Mon, 08/25/2014 - 16:08 | 5141799 marathonman
marathonman's picture

Maybe we can loan them the Boehner to remedy the problem about the tears.  Not so much the honesty, but one out of two ain't bad.

Mon, 08/25/2014 - 15:36 | 5141610 ThroxxOfVron
ThroxxOfVron's picture

"Let us give this another year before we reach a verdict.


( my new favorite sound bite.  Absolutely one of the dumbest things I have ever fucking heard.  I'll use it.  Every.  Day. )

Mon, 08/25/2014 - 15:23 | 5141552 starman
starman's picture

Just spoke with Europe, US sanctions putting serious strain on producers that relied on Russiam consumers.

The advise I got is,  if you come to Europe wear a Canadian shirt if your life matters.

What could possibly ho wrong? ! 

Mon, 08/25/2014 - 15:41 | 5141626 ThroxxOfVron
ThroxxOfVron's picture

"Just spoke with Europe, US sanctions putting serious strain on producers that relied on Russiam consumers."

"Let us give this another year before we reach a verdict."


( OMG!   It works on/for EVERYTHING.  Oh, the twisted genius! ) 

Mon, 08/25/2014 - 15:31 | 5141588 Hannibal Barca
Hannibal Barca's picture

This is sick. Trully is.

Mon, 08/25/2014 - 15:33 | 5141591 cathrynm
cathrynm's picture

This chart -- so cool, it's creepy. 

Mon, 08/25/2014 - 15:46 | 5141676 _ConanTheLibert...
_ConanTheLibertarian_'s picture

The patient has died.

Mon, 08/25/2014 - 15:58 | 5141747 yogibear
yogibear's picture

Print that currency to 0, just do it! That's what Yellen and the Fed heads are doing.

Mon, 08/25/2014 - 15:59 | 5141753 Fuku Ben
Fuku Ben's picture

We're going to take you all down with our Kamikaze financial plans

Crash & Burn MF'ers!

Mon, 08/25/2014 - 16:28 | 5141893 Spungo
Spungo's picture

tentacle rape

Mon, 08/25/2014 - 18:44 | 5142438 malek
malek's picture

So 20 more years QE to go for Germany?

Sounds about right, as then the pig "baby boomer pensioners" will have worked it way through the python - if nothing unexptected happens that is.

Mon, 08/25/2014 - 22:16 | 5143242 AdvancingTime
AdvancingTime's picture

Before the "Bernanke has all the answers" era, many of us criticized Japan for failing to own up to its problems. Many people thought Japan should face up to the mess it had created and do the right thing. Broadly accepted was the concept that only by letting its zombie banks and industries fail could Japan clean out the system and move forward.

While they claim otherwise, in many ways Bernanke and the Fed have put America on a path that mirrors the same unsuccessful path taken by Japan. A path that avoids real reform and bails out the very people that caused many of our problems.  As we measure the results of the Bernanke policy it seems they may not be much different than those achieved by Japan over the last few decades.

Bernanke endorsed and encouraged Japan to step on the gas and print more money until they lower the value of the yen and force inflation to set them on a path forward. More on where this path leads in the article below.

Tue, 08/26/2014 - 02:17 | 5143807 onmail
onmail's picture

Follow the leader --> Homo Obbama

Bend down on your knees 

and show ur A$$

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