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Albert Edwards Presents "The Most Important Chart For Investors"

Tyler Durden's picture




 

Which incidentally has nothing to do with stocks or bonds, and everything to do with all-important FX (which just happens to drive all correlation and risk pairs around the globe thanks to the far greater embedded leverage in FX, and is why all "modern" traders focus almost entirely on the USDJPY and EURUSD).

Specifically, as SocGen's Albert Edwards notes "we show on the front page chart what I believe to be the key chart investors should be focusing on at present. It shows the yen breaking down against the US dollar. This may be more than just a strong dollar story on the back of Fed tightening however, as it seems the yen has now also broken key support levels against the euro. This is a weak yen story. Though there are good fundamental explanations for recent dollar strength vis-à-vis both the yen and the euro, often commentators like to find a fundamental story to fit market events even when price movements have occurred without any clear fundamental explanation ? for we teenage scribblers (as ex-UK Chancellor Nigel Lawson dismissively called us) all have to fill those column inches of commentary."

Wait, Albert is now a chartist? So it would appear, with a few large caveats:

Sometimes it is very clear to me that instead of fundamentals driving prices, it is the charts or technicals that are important. Hence I have long been an advocate of keeping one eye on the charts to see if a major support or resistance has been broken. The very fact that the markets contain so many followers of technical analysis means that the soothsaying of chartists can actually be self-fulfilling. Nowhere is this more true than in the world of foreign exchange (FX) trading where fundamentals often play a peripheral role, even in the medium term. And in a world where momentum investing has become more ?fashionable?, FX is the one area where a clear market trend is especially seized upon with relish.

We couldn't agree more, since we ourselves enjoy point out, more often than not, when various algos activate momentum ignition strategies in the USDJPY to push the broader S&P 500 above (never below) key resistance levels. In fact, it was on Zero Hedge where we pointed out last night the extreme oversold level of the Yen. Edwards, however says to ignore this, and instead to focus on what may be historic weakness in the Yen, which in turn will clobber the global economy.

... if I am right and the yen runs sharply lower from here, then this will spell real trouble for the global economy. (Do not be fooled if there is now a pause in yen weakness or even a partial retracement from these levels, as the rapidity of recent moves means the yen is now extremely oversold against the dollar ? i.e. the daily RSI=88. This should be the pause that reinvigorates the new trend).

Why does a rapidly weakening yen spell trouble for the global economy?

First, because the Chinese economy will see a further rise in its already strong real exchange rate, especially if other Asian currencies are pulled down with the sliding yen. This will hurt the Chinese economy which, from August data, appears to be weakening again. The strengthening renminbi will also exacerbate deflationary pressures further.

 

Second, a weak yen spells trouble for the west as a wave of deflation washes in from the rapidly devaluing east. This reverses a decade long trend. I believe that profits growth is so anaemic in the west that this monetary tightening via strengthening exchange rates could in itself be sufficient to send US and European profits into outright decline and subsequently their economies into recession (via a contraction in the investment spending). That is why this FX technical break is so important

That's what could happen. Here is why Edwards believes, it will happen.

We have long believed that investors ignore Japan at their peril. Time and time again, investors have missed major global market trends that have been catalysed by Japan. We have felt for some time that a fragile Chinese economy could be pushed over the edge by a further yen devaluation – in many ways a replay of the Asian crisis of 1997. And just as the Chinese real economy data has taken a turn for the worse in August, the yen has slipped below a key 15-year support level against the dollar. This is probably the most important chart investors should focus on. The next phase of global currency wars may have begun.

 

We have written previously that Japan?s QE and the associated yen weakness could trigger a re-run of the 1997 Asian crisis, only this time sucking in the Chinese renminbi. The yen has just broken below a key long-term support and after a brief technical pull-back, its decline is likely to accelerate. This will trigger a wave of profit-crushing deflation flowing from east to west. Andrew Lapthorne has just written a great note on Japanese equities. He says yen weakness, not corporate self-help, is the key to Nikkei outperformance, with Germany looking particularly vulnerable. It looks as if yen weakness is what we've now got!

 

Staring long and hard at the Yen/$ chart, I think that, in the current circumstances, the yen/$ will head to 120 pretty quickly ? perhaps after a short reinvigorating retracement. And, if the dollar’s ascent is given extra impetus by the DXY also breaking out, a decline in the yen below Y120 will see an end to its 30-year uptrend – a trend that has relentlessly exported deflation from the west to Japan. Sound far-fetched? One of the few things I have learnt over 30 years in this industry is that when traders decide the yen/US$ starts to move it can jump by Y10 or Y20 very, very quickly indeed.

Remember that "shocking" CPI print from last week? If the SocGen strategist is right, prepare for many more such "stunners" as Japan makes deflation-exporting its only business model, one which could well crush the economies of Europe, China, and the US... and Japan! Case in point: recall what just happened to Sony last week. But the all important offset, a rising global stock market, should make it all better at least until the entire economic base is so hollowed out, not even algos can dismisses the record divergence between stock market myth and economic reality.

Edwards' bottom line: "If a clear break in the yen downwards against both the dollar and euro is occurring, not only will this spell trouble for the beleaguered Chinese economy and exacerbate deflation in the west, but it will also break the spell of German economic dominance."

 

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Mon, 09/22/2014 - 09:12 | 5242608 yogibear
yogibear's picture

The US Federal Reserve's grand infinite debt and printing experiment blows up first. People in the US get to see their future.

Mon, 09/22/2014 - 09:18 | 5242623 kliguy38
kliguy38's picture

don't worry granny's got your back.............

Mon, 09/22/2014 - 09:24 | 5242634 NoDebt
NoDebt's picture

Ugh.  FX stuff.  We should just have one currency for the entire world.

Oh, no, wait a minute.  On second thought, maybe that's not such a good idea.

 

Mon, 09/22/2014 - 09:27 | 5242646 ArkansasAngie
ArkansasAngie's picture

The global elite would sure like that.

screw'em

Mon, 09/22/2014 - 11:28 | 5243064 nope-1004
nope-1004's picture

This can easily be explained by Tim Geithners "strong dollar policy" of the US.

 

 

 

 

 

 

 

 

 

 

lmfao

Mon, 09/22/2014 - 19:36 | 5245124 Squid-puppets a...
Squid-puppets a-go-go's picture

im waiting for Tyler or someone to cover the derivative implications of these FX gyrations

could be the daisy chain clsterfuck that default swaps were in '08

Mon, 09/22/2014 - 09:27 | 5242647 GetZeeGold
GetZeeGold's picture

 

 

but it will also break the spell of German economic dominance

 

Ummm excuse me....but Germany is the only thing that is keeping EurolandTM alive.

Mon, 09/22/2014 - 10:56 | 5242952 NotApplicable
NotApplicable's picture

Of course not. It's all due to Draghi's hot air machine and creative accounting.

Mon, 09/22/2014 - 11:03 | 5242971 The Longest Call
Mon, 09/22/2014 - 09:25 | 5242643 ArkansasAngie
ArkansasAngie's picture

Abe said he wanted the yen at 115.  It looks like he's going to get it.  

Granny ain't going to backstop this currency war. 

Germany's got a problem?

US export price competitiveness is going south and it will show up in GDP numbers

 

Mon, 09/22/2014 - 09:40 | 5242674 i_fly_me
i_fly_me's picture

115 is going to whistle past so fast it'll make his bosses' yarmulkes spin like propeller beanies.

Mon, 09/22/2014 - 09:32 | 5242655 Badabing
Badabing's picture

Ringgggggggg ringgggg
Hello?
Do you have Albert in a can?
Yes we do.
Can you kick it?

Mon, 09/22/2014 - 10:20 | 5242821 gmrpeabody
gmrpeabody's picture

Rinnnngggg rinnnngggg

Hello?

Is your refrigerator running?

Mon, 09/22/2014 - 12:36 | 5243410 Eyeroller
Eyeroller's picture

Yes, my refrigerator is running.

Then you'd better go and catch it!

 

(Haven't heard this one in years!  Thanks for the memories.  When I was a kid there were no mobile phones, and we used this exchange for a Friday night prank call.)

Mon, 09/22/2014 - 09:17 | 5242624 DeadFred
DeadFred's picture

This will make Obie make some hard choices- bomb a country or another round of golf???

Mon, 09/22/2014 - 12:17 | 5243320 KnuckleDragger-X
KnuckleDragger-X's picture

Explosive golf balls....

Mon, 09/22/2014 - 09:12 | 5242609 onewayticket2
onewayticket2's picture

didnt Kyle Bass say he thought the yen could go toward 200?

Mon, 09/22/2014 - 09:16 | 5242619 gmrpeabody
gmrpeabody's picture

Kyle has been harping on this for a long while...

Mon, 09/22/2014 - 09:24 | 5242632 SAT 800
SAT 800's picture

Get used to it; Everybody who is right; is too early. I've been "harping" on Silver since $4.35/oz. The name of the game is futures; not presents.

Mon, 09/22/2014 - 09:25 | 5242645 Uchtdorf
Uchtdorf's picture

Do you mean silver is headed down to that price again?

Mon, 09/22/2014 - 09:28 | 5242652 GetZeeGold
GetZeeGold's picture

 

 

 

If it does.....expect Kyle Bass to break out his nickles.

Mon, 09/22/2014 - 10:10 | 5242774 Alea Iactaest
Alea Iactaest's picture

Albert and Kyle BFFs?

 

Global deflation looms, warns SocGen bear Albert Edwards

Of course that headline was from April 2014 and the cause was China's weak economic data.

Source: http://www.cnbc.com/id/101609500

 

Or there was this one, from October 20, 2011:

The Coming China Crash Will Separate the Sheep from the Goats

Source: http://www.businessinsider.com/albert-edwards-predicts-a-hard-landing-in...

 

Just another "buy the rumor, sell the news"? Just another douche talking his book? Either way, there's something going on FX. Just don't look to Albert for any new ideas.

Mon, 09/22/2014 - 14:49 | 5244015 Raisuli
Raisuli's picture

I like my 35% silver War Nickels. I'd like some more.

Mon, 09/22/2014 - 09:12 | 5242610 Leonardo Fibonacci2
Leonardo Fibonacci2's picture

Sushi anyone? Don't forget the Sake in case the sushi has a bacteria that will kill you!

Mon, 09/22/2014 - 09:13 | 5242614 dicksburnt
dicksburnt's picture

japan is the pivot point

Mon, 09/22/2014 - 09:14 | 5242615 So Close
So Close's picture

Nothing changes... until it does.

Mon, 09/22/2014 - 09:15 | 5242616 Rainman
Rainman's picture

The FX closet is so full of dirty shirts it's impossible to tell which is the dirtiest.

Now, komrades,  let's get on with the race to the bottom !

Mon, 09/22/2014 - 09:25 | 5242641 SAT 800
SAT 800's picture

And don't give up an inch of ground at Stalingrad; fight to the last man and the last cartridge. Hmm? Yeah, I think, I'll just go along with the race to the bottom meme.

Mon, 09/22/2014 - 09:15 | 5242617 WTFUD
WTFUD's picture

The Great Yawn!
Yen and the art of motorcycle maintenance.

Mon, 09/22/2014 - 09:16 | 5242618 Ivanovich
Ivanovich's picture

Someone ask Stolper.  He'll know.

Mon, 09/22/2014 - 09:19 | 5242627 nakki
nakki's picture

Thank God the Japanese are energy independent or else the drop in Yen could be a real problem. Then again think of all those Walkman Sony will be selling.

Mon, 09/22/2014 - 09:22 | 5242630 ekm1
ekm1's picture

I luuuuuuuuuuuuuuuuuuuuuuuuve DEFLATION

 

And Edwards of course never a worked a day in a real job, it seems, by looking at.....................just deflation

 

Neither Inflation nor Deflation matter.

What matters is the comination of both for Costs and Finished Product Price

 

PROFIT = SELL PRICE - COST

 

PROFIT must be large enough to keep the business open and employ people.

 

Inflation/Deflation of Finished Products which is reported now, it irrelevant.

 

What matters is the combination of Inflation/Deflation of Costs and Finished Products .....produce a ...............(wait for it)..............PROFIT

If no profit, then business shuts down

 

But of course. What is to be expected from people who never a did a real job in their lives like Mr Edwards or any finance writer.

Mon, 09/22/2014 - 09:25 | 5242639 Uchtdorf
Uchtdorf's picture

If deflation pushes down the price of shiny, I love it too.

Mon, 09/22/2014 - 09:28 | 5242651 NoDebt
NoDebt's picture

I'm not so sure.  I look around and see IPOs for companies with no profit (sometimes not even revenue) and people can't get enough of them.  I look around a see news networks like MSNBC, CNBC, etc. that have no viewers (sometimes for years running) and they never go off the air.

Profit, like taxes, is for the little people.  There's a trick to running a business that never goes under despite not turning a profit.

Mon, 09/22/2014 - 09:32 | 5242658 ekm1
ekm1's picture

Yes. Government guarantees, like in communism

Which means central control of means of production

 

It does not increase output or REAL employment with REAL acceptable income

Mon, 09/22/2014 - 09:48 | 5242704 LostandFound
LostandFound's picture

the company i work for, uses cash from securing more projects to trade as profit. Obviously the company is fucked if it is unable to grow year on year, it also writes off liabilities down stream (to smaller companies), so the companies producing the real good and services end up getting screwed and then relying on further bail outs and credit expansion to survive. 

i am convinced the entire stock market is based on this false pretense, the profit earnings are in fact shrinking year on year and instead getting replaced by debt and credit extension. 

i am talking on behalf of the construction industry here. 

Mon, 09/22/2014 - 09:56 | 5242737 ekm1
ekm1's picture

stocks, bonds, money, fx are not edible, neither can they be used as fueld for trucks

 

Economy, people need real output to live on

Mon, 09/22/2014 - 11:42 | 5243141 LostandFound
LostandFound's picture

I have just seen the Tesco post, what a sham, bringing in future commercial income to the present and delayed current costs to the future.

This is the bullshit im talking about.....

The smell of a collapse is getting stronger every week

Mon, 09/22/2014 - 12:23 | 5243338 KnuckleDragger-X
KnuckleDragger-X's picture

Booking unrealised future profits is much easier than generating real profits in the present...

Mon, 09/22/2014 - 09:32 | 5242660 yogibear
yogibear's picture

All perception. It's about keeping the BS game going and the bots making money.

Mon, 09/22/2014 - 11:04 | 5242968 Not My Real Name
Not My Real Name's picture

Agree, NoDebt. Profit is profit. The money requried to employ workers and keep the lights on is part of COSTS -- those expenses do not come out of the PROFITS jar.

Mon, 09/22/2014 - 10:39 | 5242877 all-priced-in
all-priced-in's picture

I think I understand your point - to focus on profit - I agree with you in theory

But in the real world - when competition starts driving down selling prices - you must match them - and you must reduce your costs.

 

When people start losing their jobs because of layoffs to cut cost - or even if companies just did outright pay cuts it will soon start to gain momentum.  

 

It is the loss of jobs & employee income that turns things to shit - even if a company could reduce costs and keep profit levels the same - fewer employees earning smaller paychecks causes the downward spiral.   

 

Plus anyone that has debt that must be paid back will suffer 3x.

 

 

 

 

Mon, 09/22/2014 - 11:46 | 5243151 LostandFound
LostandFound's picture

Why bother with all this nonsense, cut the staff and use the savings to buy back stocks and increase share profitability!

what a sham of an economy lol 

Who needs real good and services right? i think i might start trying to condition my body into eating paper, might as well start early...

Mon, 09/22/2014 - 09:47 | 5242690 Mike in GA
Mike in GA's picture

Bass has been spot-on for years saying Japan 1st, then Europe, then the US.  This recent strengthening in the $ is part of his predicted "flight to quality" that portends the Keynesiam superstorm approaching. 

 

Timing has always been - and remains - unpredictable. 

 

Mon, 09/22/2014 - 10:11 | 5242785 Alea Iactaest
Alea Iactaest's picture

Timing unpredictable? Possibly the understatement of the day. Remember kids, being right but getting the timing wrong is still WRONG! Unless you're playing with OPM then it's all good.

Give me my 2 and 20.

Mon, 09/22/2014 - 11:10 | 5242983 Jafo
Jafo's picture

The timing doesn't matter if you are just an informed spectator.  It gives me more time to get the popcorn and the beer ready for the spectacle.

Mon, 09/22/2014 - 09:25 | 5242635 youngman
youngman's picture

How is the nuclear reactor doing....

Mon, 09/22/2014 - 10:59 | 5242960 JRev
Mon, 09/22/2014 - 09:25 | 5242640 IronShield
IronShield's picture

It is all one major $hit show with a $hit storm soon to follow.  Expect significantly lower gold prices prior to a complete re-alignment of the system.  Woe (or shame) unto those not prepared; it will be quite an eye-opener, especially for my exceptional brethren.

Mon, 09/22/2014 - 09:28 | 5242648 SAT 800
SAT 800's picture

Metals rallying as we speak.

Mon, 09/22/2014 - 09:38 | 5242671 IronShield
IronShield's picture

Yep, what a sight to behold.

Ho Lee Fuk!  LOL

 

Mon, 09/22/2014 - 09:59 | 5242742 SmallerGovNow2
SmallerGovNow2's picture

Bought four gold liberty eagles last Friday.  Will keep stackin' on every dip...

Mon, 09/22/2014 - 09:30 | 5242649 ThirteenthFloor
ThirteenthFloor's picture

If the dollar crashes then the RMB will look pretty good, even the Argentine Peso will look good.

I see China making better investments towards future growth plus getting into hard assets such as RE and PM than US, Japan or Europe.  Further Chinese banks don't play derivative.  Always go where the income is, and china has solid income.  For example 1 ton of H3 has the same energy content as 670,000 railroad cars of coal.  That is income potential.  The Chinese BMW factories can build more cars than can be supplied steel.  

US and Euro are in third world economy mode, by investing/promoting ecommerce junk like facebook and groupon.

Mon, 09/22/2014 - 09:55 | 5242735 yogibear
yogibear's picture

More companies overseas outsourcing. 

The only thing the US is producing is debt.

Mon, 09/22/2014 - 11:41 | 5243133 Quaderratic Probing
Quaderratic Probing's picture

If the USD crashes and the YAUN does not what do you think happens to the prices in Walmart? 

Walmart already says 4 days before payday sales drop

Mon, 09/22/2014 - 09:36 | 5242666 IronShield
IronShield's picture

Watched Faux News on the weekend and was shocked, shocked I say, by the calls for a War Tax AND a reinstatement of the Draft!  Those some desperate mofo's!  LOL

Sorry douche bags; ain't gonna happen.  Starving that Mofo is working!  Remember to turn your backs on those psychopathic Mofo's that will soon have their hands outstretched on every street corner.  The sooner the better.

Mon, 09/22/2014 - 09:48 | 5242696 Mi Naem
Mi Naem's picture

I think a reinstatement of the draft would be FABULOUS, and I say that as a father of draft-aged boys and girls. 

Then, finally, we could get the vehement resistance to all war all the time everyfrigginwhere that is so sorely overdue. 

But, alas, I don't think it will happen.  Our robotic flying/spying machine video games will be supplemented by enough well-meaning patriotic dupes who think they are defending "our country" who sign up after another massive false flag that the draft will be unnecessary. 

Mon, 09/22/2014 - 09:58 | 5242740 IronShield
IronShield's picture

Well, you can leave the girls out of it; no equality until they put themselves in the meat grinder as well.  Not that we will ever be equal since we each offer up our own unique, and vastly different, contributions to each other as part of the 'contract'.

Not sure I would want to play that hand of poker since it would be the fearful masses who would gladly sacrifice, not only YOUR children, but theirs as well; as long as the game can continue and they can collect their dues.  After all, they worked their entire lives for that entitlement (LOL).  And if you don't believe that, check Scotland.

It won't happen, but not because of what you think.  ;-)

Mon, 09/22/2014 - 10:44 | 5242917 Mi Naem
Mi Naem's picture

"...the fearful masses who would gladly sacrifice, not only YOUR children, but theirs as well..."

Yeah, many weak-kneed or "patriotic" parents would do so, but the kids will have something different to say. 

It is their emphatic objections I think we could rely on to grow and embolden quickly.  When the parents see the police state dressed as soldiers corralling their own kids, then many parents will push back even harder.  But, again, I think we'll not find that our for a long time, if ever. 

 

Mon, 09/22/2014 - 13:35 | 5243697 IronShield
IronShield's picture

Yeah, many weak-kneed or "patriotic" parents would do so, but the kids will have something different to say.

I hope you are right!  Something tells me that an 18 year old male being wrapped in the flag feels something different.  Look at the media celebrating our Warriors.  Thank you veterans!  They should be saying "Thank you veterans for doing the job to sustain a system that was NOT set up for your benefit."

The gig is up my friend.  I'm always early to the party, but I'm never wrong.

Mon, 09/22/2014 - 12:04 | 5243245 StupidEarthlings
StupidEarthlings's picture

They should just rig up video game system so that they are controlling real aircraft/drones/robot fighters...then all theze kids would be controlling them from the safety of their own basements..AND fighting a real war. Win win for everyone.

Mon, 09/22/2014 - 09:46 | 5242689 vegas
vegas's picture

Dear Albert: The only "chart" that matters to me is my account equity; if it isn't continually rising, I get to join you in the "Pudding Business".

 

www.traderzoo.mobi

Mon, 09/22/2014 - 09:49 | 5242706 Notsobadwlad
Notsobadwlad's picture

Every day we see another "most important chart". Sorry, I do not believe it is the most important chart for investors.

Mon, 09/22/2014 - 10:03 | 5242752 jubber
jubber's picture

Albert Edwards is the only man whose predictions have been worse than Peter Schiff, Marc Faber and Jim Rickards put togather, NOTHING he has predicted since the crash has occured although I am not saying his line of thought or the others is wrong, but none of then have come to pass, or likely to while every Central Banks is running an agreed script.

Mon, 09/22/2014 - 10:15 | 5242801 Alea Iactaest
Alea Iactaest's picture

Like so many others, the thesis makes sense but the "reality" of the markets has made him a (temporary?) laughingstock. That said, I gave you a +1 b/c his calls have been consistently off the mark thus far.

Mon, 09/22/2014 - 10:03 | 5242755 dariomilano
Mon, 09/22/2014 - 10:04 | 5242758 hero HNL
hero HNL's picture

The yen has been too high until now & not good for Japan.

 

Abe wants 115 but 120 is more reasonable......I'm thinking 122 or 127 at the most. If china collapses, it can go down to 140 in a blink of an eye.

 

Better prepare for 125 at least.

Mon, 09/22/2014 - 10:17 | 5242807 Alea Iactaest
Alea Iactaest's picture

Not good for Japan? Which part of Japan are you talking about? Not the people paying for imported energy. I'm pretty sure they're bleeding out their asses. Or they will be this winter.

Mon, 09/22/2014 - 10:16 | 5242805 chinaboy
chinaboy's picture

There is no investor in the FX market. A break down in yen will lead to more round ups of trading criminals. I do not see how that affect us no matter what Mr. Edwards say.

Mon, 09/22/2014 - 11:24 | 5242809 jackstraw001
jackstraw001's picture

FOA 1/11/00: "The strong US economic success has been spelled out more in our SOL (Standard Of Living) than if expressed in financial accounts. Dollar exchange rates, interest on dollars, stock market values, home values all represent what an American "can buy" if they decide to spend their wealth. Not what they presently have as owned wealth, paid up 100%. This leveraging of dollar affairs has created an "illusion of savings" that in effect allowed a high SOL. In other words, we live high on the hog today because our present equity values and savings don't really exist. Time has transformed the entire dollar system into a giant "futures contract" that only represents the wealth we could obtain in partial "future purchases". Just like the gold market, we mostly trade paper wealth and call it real. Yet, if a large percentage demand for delivery ever happened, the contracts would fail. Yes, our wealth and economy status is really based on us cashing in and buying just a little at a time. If we didn't, the illusion would be exposed. Only our present dollar economy is "super leveraged" not just into the future of US goods production, rather it also completely depends on future foreign fulfilment to produce those real goods. Truly, most of our present sizeable financial wealth is little more than a function of the "acceptance of dollars overseas" by others."

Mon, 09/22/2014 - 10:18 | 5242810 LawsofPhysics
LawsofPhysics's picture

If that paper won't buy you any calories you are properly fucked.  This is the only thing that matters, period.

Mon, 09/22/2014 - 11:11 | 5242999 dark_matter
dark_matter's picture

Or if the paper can buy you calories and you have no paper and no land to grow you own. Calories really are the bottom line. At the height of the Weimar inflation people spent 90+% of their income on food. You can keep wearing your old clothes and move in with grandma but you gotta have calories.

 

Mon, 09/22/2014 - 15:16 | 5244111 Ancientkarma
Ancientkarma's picture

Correct! The problem will be inflation in the euro zone.

Mon, 09/22/2014 - 10:37 | 5242855 falak pema
falak pema's picture

Albert Edwards has been a running bear looking lost in a 6 year bull run. 

And it could be said that the world has not understood what the Mussolinien neo-feudal construct of today's first world implies on the monetary side. The tug of war stays under the carpet, as thieves who fall out cannot be part of the G20/IMF show and also spit on the greenback reserve. Simple as that. They are ALL in the same boat; Titanic, Golden Hind or Radeau de la Méduse.

I think you, the media,  are missing the point from Obammy's perspective (which btw in this crazy upside-down world is JUST focussed upto next election, when he can go into a well merited retirement, just like GWB his crazy Neroistic blood brother of red/blue Oligarchy  :

The USA has never had it so good since he is POtus. Just look at WS indecies and look at USD symbolising the strength of Greenback God; where all of China believes in the Dow and S&P, aka Ali Baba comes to town...

Based on that perspective, his current job of running the world, including swatting the ISIS fly, with a drone fly killer, is just a fleeting pastime on Pax Americana's global chess board inherited from LBJ's great society and MIC run "Nam bam-bam" legacy.

Hmmm, can Obammy just kill flies from the sky and not have to send boots and spill guts n blood of the US young and deluded--precisely like in Nam? 

Reminds me of UK post Suez debacle : when then PM Harold Macmillan talked of "winds of change" to evoke the dismembering of Empire and "goodbye to all that". 

But in the looming 1959 election he did say : You've never had it so good. The country elected labour to snub his smuggish pseudo-optimism and then UK welfare bucket went decidedly "living off the state" -- all the while British industry nose dived (not in 59 but in 64 onwards and for many years, until Maggy came and bollocked the Unions).

So, if Pax Americana now feels "the winds of change" blowing in Caliphat run Syrac (like small-Mac in 59 with Jomo Kenyatta running wild in Mau-Mau Kenya) and Obammy says : You've never had it sooooo gooood! 

You can know what to expect further down the road! 

Mon, 09/22/2014 - 10:41 | 5242905 NoWayJose
NoWayJose's picture

This may have been true in the past, when Japanese products became cheaper and the combination of lower price and hgh quality out-competed the world.  However, just like in the US, the manufacturing companies in Japan have off-shored their production to China and other Asian countries.  Thus the ONLY thing that will happen is that Japanese consumers will see higher prices for products bought from 'Japanese' companies.

Mon, 09/22/2014 - 11:44 | 5243149 malek
malek's picture

In some ways the article displays the brain-twistedness of today's thinking in all its grandiosity.

Japan makes deflation-exporting its only business model

Why isn't Japan labeled "inflation-importing"? After all it's Abe who first set the printing presses to Ridiculous Speed.
The carry trade should not play a big role for future outcomes at this time, as interest rates around the world are close to zero.
So is it deflationary for the time the FED, ECB, BOE, SNB are acting coy on answering Abe by setting their presses to Ludicrous Speed?

Please enlighten me!

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