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Charting Banzainomics: What The BOJ's Shocking Announcement Really Means
Still confused what the BOJ's shocking move was about, aside from pushing the US stock market to a new record high of course? This should explains it all: as the chart below show, as a result of the BOJ's stated intention to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month it means the BOJ will now soak up all of the 10 trillion yen in new bonds that the Ministry of Finance sells in the market each month.
In other words. The Bank of Japan’s expansion of record stimulus today may see it buy every new bond the government issues.
This is what full monetization looks like.
More from Bloomberg:
The central bank is already the largest single holder of Japan’s bonds, and the scale of its buying could fuel concerns it is underwriting deficits of a nation with the heaviest debt burden. The BOJ could end up owning half of the JGB market by as early as in 2018, according to Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo.
“Kuroda knows when to go ALL in,” Okubo wrote in a note. “The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation.”
The unprecedented efforts to stoke inflation could scare bond investors, said Chotaro Morita, the chief rates strategist in Tokyo at SMBC Nikko Securities Inc.
Kuroda said earlier this month that while the BOJ holds only about 20 percent of Japan’s outstanding government bonds, the Bank of England holds approximately 40 percent of U.K. government debt.
We wish Japan the best of luck in avoiding becoming a "failed nation."
Then again there is something to be said about a nation which is now desperately, and obviously to everyone, trying to unleash hyperinflation... and, for now at least, is failing.
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Japan as a whole is in crisis-situation since 1990. Someone is still backing them like its a tapdog.
You would think gold and oil would be up when currency is printed like confetti. Is the fact that it isn't saying that this is a disaster and headed for a deflationary depression?
When if fails, Krugman, of course, will say that it was because they didn't do enough. They tried for 20 years and went down Kamikaze style. Let's hope they don't take everyone with them, which is looking very possible.
"Banzainomics," haha. Perfect...
http://upload.wikimedia.org/wikipedia/commons/3/3d/My_Japan_10_IJA_banza...
This is too funny! Too bad the sheeple aren't organized enough to see the beautiful solution in front of their eyes...Just keep gently guiding all these big entities to buy back their own stocks and bonds, trying to keep that price up. When they've finally absorbed enough, tell 'em "Thank YOU!" and leave them stuck with it. Don't buy ANY of it back, stocks, govt. bonds, nothing.
Take the bulk of all that bad finance, quarantine it, then gas it. But that'll never happen, as all those sheep think they can 'play' the markets, and will try to stick around as long as possible, lest they miss out on some profits.
So THEY are the ones that end up being "gently guided"...
Definition of insanity
Next
Countries can take turns to QE the markets up and the sheeple are happy
Only our kids and grand kids will pay
Party on idiots
They took away Huny Boo Boo and soon they will take away my fav game - kandie krush What will we all have to do now - we are so fucked
"Only our kids and grand kids will pay"
The point very few are willing to talk about. Thank you for being brave enough to broach the topic. The absolute refusal to let banks, investments, business, governments, go belly up, is guaranteeing a two-tiered society of haves and have nots. The primary goal is to guarantee the wealthy stay wealthy and they will pass that wealth to their heirs.
So what happens when BOJ, FED and ECB all simultaneously simply "retire" the debt or give it back to the respective Trasury Dept. of each county? Yeah, I know, it's monetarization and that's supposed to be a hyper inflationary event, but if everyone is in it together, I'm thinking it will all turn out to be a complete non event, and no more inflationary than all the massive QEs have been. Debt problem solved.
Yes and pay back foreign debt, seal the border for 3 years until the immigration mess is fixed, impost import duties to spark domestic production and bite the bullet cause it will hurt - better than death fast approaching.
It kind of depends on which problem you are talking about. The debt owed by the governments to their respective central banks are already meaningless. The Fed refunds the vast majority of interest it earns back to the federal government. After all, the government could simply print their own currency and pay no interest on that. So essentially the "debt" has been retired through monetization already.
The real problem of economic malaise in the developed world would still remain. Japan, EU, the US, all have structual issues that must be reformed. This problem has not, can not, and will not be solved by printing additional currency units, period.
First, the FED hasn't stopped QE, I don't care what they say. Prove me wrong. Secondly, the japan fiasco IS American QE.
For fuck sake there IS NO "japan," it's just a colonial possession of the FED.
They haven't. Go to the FEDs own web site. They are using currency swaps and overnite repos to get around it and try to hide it. They did $15 billion last week so . . .
http://www.federalreserve.gov/releases/h41/
Sending money to only your banker friends, who already have "moar" than they can spend, will not get the BOJ where it wants to go. Why not just send each household 100,000 Yen and then take a measure of "inflation"; if that doesn't work nothing will and this is the Rubicon they will not cross so their policies are doomed to failure and, admittedly, even sending money directly to consumer doesn't mean they will spend it but the probability is high that they will. Better not to know for sure, right?
So, sending the entire population $833 will fix it? At least there will be more Yen millionaires and billionaires as the purchasing power of the Yen continues to evaporate...
double post
Never ever trust a Nip balance sheet.
You do know that all Japanese balance sheets deliberately understate corporate and government liabilities. Otherwise Japan would be banjaxed if the real level of liabilities was ever reported.
Keep this shit in mind the next time you think of Lord Rothschild or David Rockefeller as being cunning overlords. They aren't.
They are spoiled selfish idiots who no more understand monetary banking than a feudal boss of a medieval canton.
Idiots.
Shame on these desperate, addled, delusional squanderers. It's time for humans to realize that freedom from this sad slavery to hierarchy is possible in our lifetimes.
So after this...what other moves do they have left?
That loud scraping sound you are hearing is the bottom of the barrel.....
What about QE Australia?
Could that be next?
This will continue until the U.S. can't threaten anyone else.
This could end with a few targeted assassinations.
Fed stops printing, US markets go down. Japan announces unexpected massive QE, US markets go up......Nothing to see here folks.
Abe trumps Draghi, I'll do MORE than whatever it takes...
So, hyperinflation is not failing? It should be said, the policies that got them to this point occurred over decades. I wonder, if as it occurred in the United States, that during these dacades of economic mismanagement anyone that spoke up was shouted down and demonized by the bulk (MSM, here) of the media and by so many of those in government, and a deaf central bankers.
What is reaped is what is sown.
This is not going to end well when there are heroin addicts running the printing presses.
http://www.youtube.com/watch?v=CrEJrI2pU5w
“The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation.”
REALLY, they have been trying to fix thing since the 1990's. what is going to change?
I know Godzilla will fix everything.
http://www.youtube.com/watch?v=e7QLb5qle48
http://www.youtube.com/watch?v=T65rW_SIzg0
Jesus H. Christ! " This is what full monetization looks like."
Think about this in the sense of physical laws. If you use physics, instead of economics, to evaluate what full monetization means, you will see that it means an Epic Failure has happened, but the BOJ is going to try and hide it for as long as possible. According to unbreakable physical laws, you can NOT sell debt to yourself at a full 100% sell to buy ratio and remain an economy. Law says you must collapse utterly! So that is what it takes to Juice US equity markets.
Fuck 'en Hell! Do you know how totally screwed the financialized economy is? Well, now you know!
kamikaze currency
Convince me that the US won't get sucked into the Japan "event horizon" by extending a loan (if we are still around to do it) when they need it.
the inability of Japan to create inflation should be a warning to Keynesians- the phrase pushing on a string comes to mind
the lesson is: you don't get inflation when you want, instead you get it when you can least afford it
Japan has reached the surreal levels of the Twilight Zone episode where debt can be 'wished away to the cornfield'
http://www.positive-feedback.com/Issue9/images/cornfield.jpg
So the Fed stops and JPN starts making an ever increasing amount of digital bit money from nowhere. My mind sees a bathtub filling up during an earthquake and sloshing digital bits back & forth until it over flows, the sides crack and it all blows out.
Who-hoo, grab your hat and watch the ending in Dr. Strangelove.