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"The Most Important Chart For Investors" Flashback, And Why USDJPY 120 Is Now Coming Fast
Back in late September, we posted what Albert Edwards thought at the time was "The Most Important Chart For Investors" which was quite simply, a chart of the USDJPY. Here is the punchline of what he said:
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.
Considering the BOJ's overnight move, he was absolutely correct.
So for all those who missed it, here it is again, because it explains not only where the Yen is headed next, but why, sadly, this could well be the end of Japan and the mirage of a recovery that has had everybody hypnotized for the past 6 years.
Albert Edwards Presents "The Most Important Chart For Investors"
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."
* * *
And here is what Albert told us moments ago:
The amazing thing is how little interest there is with western investors about Japan and how it effects US or European portfolios
Notwithstanding the fact that it is the 3rd biggest economy in the world by a long way (the same size as Germany and France added together if you look at it the right way ie current exchange rates rather than PPP)
Little understanding out there what yen devaluation means for Chinese renmimbi and how they will be forced to devalue too
ECB money printing will never be able to compete with Japn. The euro might be going down v the dollar but it will be going up against theyen
Little understanding how, not only will eurozone be going into recession and deflation but that Germany will be the weakest economy in zone. Once Germany’s budget deficit starts to rise sharply as a result of their recession the new mad balanced budget act will kick in and they will be cutting spending aggressively. Expect the eurozone to disappear down a black hole!
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What part of all fiat will go to zero don't people understand? This will also be an exponential process. Interesting times, many opportunities...
I don't understand the part where gold and silver get hammered vs fiat.
Black hole.....raycist
"not only will eurozone be going into recession and deflation but that Germany will be the weakest economy in zone"
I see, a conclusion from a french institution
Bastiat I don't understand the part where gold and silver get hammered vs fiat.
Financial insolvency = desperation. Don't try to rationalize, just buy PM's as they go down because one day all financial paper will be wiped out - completely. The markets are a complete fraud.
True value vs percieved value. The value of the piece of paper in your wallet is whatever the gods of the marketplace decide it is...today.
Fiat money is like Chuck E Cheese tokens...they are only useful as long as there are Chuck E Cheese restaurants around to spend them in. But if they go out of business, all you have is a pocket full of brass rounds with a mouse's face on 'em.
"Interesting times, many opportunities..."
name one
If you have the liquidity in an environment starved of that then you can purchase hard goods and services from bankrupted firms for fractions of the real value.
You can be a vulture, a scavanger, a bottom feeder, and pick the carcasses clean.
First the Central Banksters and the wealthy financialists act upon the host organism, a productive society, as a leech, by extracting the nutrients vital for growth and health. Then onece the host dies, they soak up the rest of the nutrients before they move onward to the next victim.
That is the reason why they need to be exterminated as they are the disease.
As most any other lower form of life they have no spirit, no cares about others, no soul, and are absolutely self interested...psychopaths. They are sub human. They do not eventhink about that which they do, or the suffering which they cause. It is just thier nature.
They feign to be capitalists, WHICH THEY ARE NOT as capitalists invest thier wealth into productive businesses. They are financialists seeking to extract wealth from failure, from misery, and from suffering. They give no appreciation but serve to take a depreciation from any host which they infect...even to the host's demise.
They are just like any bacteria, virus, or prion and destruction by fire needs to be thier fate.
no- seriously TT, dont be shy-go ahead and feel free to tell us how you Really feel about bankers
Personally, I think their mothers ought to have eaten them while their heads were still soft.
I listened to a friend 3-4 years ago and started reading ZH. Awhile later....when the DJIA was just under 14,000 - after the big dip of '09 - we got out. Now, after all this reading and all the prepping, I'm wondering just how much more of a fool I can be with my money? DJIA 17,390 close today. This has cost me over $100k, listening and believing all this. Done.
If you have been around that long then you will have read the phrase, Don't fight the Fed, a million times. If you didn't fight the fed, you made money. If you fought the current of the fed, you drowned. You're living in an era of manipulated markets. It may not be the best place for you to invest. Hard assests might be better; I just purchased a small commercial lot acorss from a college from a paniced seller. Not that you should do this, but buying and holding hard assets might give you better peace of mind.
Cheers and chin up.
The country will probably not make it past th next election anyway. There... some more ZH gloom and doom so you don't go away hungry.
jb
I prefer to believe getting out was the right thing to do. No, it has produced no profit for me, but principles rarely do. If more, if not all, had abandoned the sham of so called markets, the financial leaches would have been forced out. It is those still trying to claim a profit from this rigged game that keep it going, allowing these criminals to lever every asset in the world to an eventual default. Corruption survives on greed with no moral compass. If seemingly everyone is doing it, how bad could it be, right? Doing the right thing has benefits that don't show up on your balance sheet. If you were relying on profits from this market for your survival, you have been betting on the wrong horse anyway.
There's really no use in dwelling on water under the bridge. But you might ask yourself, if you hadn't started reading zerohedge and you had proceeded with staying in the casino and you had $100K more now...now what? Would you have the sense to get out now? Would you still play? Would you still play with even more leverage?
The only thing I would be really pissed about is the economic opportunity cost of that $100 grand. Would you have used it to go on vacations/make memories with the special person in your life? Or would you have used it to enrich your life in some way (not talking accumulation of Bullshit Federal Reserve Notes).
Believe me, Money comes and goes. Making memories is what it is all about.
You are acting like the game is over in the seventh inning stretch. Talk to me in 2 years.
It is in the interpretation and action taken based on the relevant information published by ZH. I am an avid reader and ZH content tipped me off to the weakness in the global economies, regardless of the level of the S&P 500. I told anyone who would listen to me in late 2013 and early 2014 that interest rates were going to continue to drop, even though the conventional wisdom in main stream press reports was that interest rates were sure to rise in 2014. I also put my money where my mouth is and bought diversified muni bond funds, which pay monthly tax-free dividends, They have all rallied (driven by falling interest rates) since my purchases in Jan 2014. Thank you, ZH.
A wise man once told me about a thing call the world suck hole chart. Picture a upside down pyrimid. On the bottom there is, I then the next level is Family, the next level Community, the next level Society, the next Level is Global/Humanity. These parasites only act from the I perspective seeking what is good for themselves with no regard for the rest of the community. It cannot last forever and those that seek only personal gain given enough time self destruct. The problem here is that thier destruction will bring about a lot of hurt for the rest of the people. Luckily for us they have not succedded in completely destroying masculinity or Maleness. Men can act without emotion, can overcome fear and understand what being honorable is. The remaining men will survive and thier supporters (wives/women) will survive with them. Lets think about what group has been under attack for the last say 7 decades, its men. Estrogen mimickers are in the food we eat, they leach from the plastic that is used to store the water we drink do you think it is by accident when there are cheaper plastics that don't do this that could be used?
"Mandrake, have you never wondered why I drink only distilled water, or rainwater, and only pure-grain alcohol?"
And average sperm count is down something like 50% - 80% since 1900. Like I need that pressure with my little dick.
@TT
"As most any other lower form of life they have no spirit, no cares about others, no soul, and are absolutely self interested...psychopaths. They are sub human. They do not even think about that which they do, or the suffering which they cause. It is just thier nature
They are just like any bacteria, virus, or prion and destruction by fire needs to be thier fate"
So you're basically talking about ASHKENAZI's here ~ just to be sure?
More like Chuck E Cheese skeeball tickets. The tokens represent your time and daily labors in exchange for physical brass zinc tokens which have some sort of physical value. Once you get your fiat paychecks its gone full skeeball tickets.
^---- Harumph
Exactly. You MUST divorce yourself from the idea of thinking of the value of PM's in dollars...it leads to distortions in how you view other economic data.
Think of gold as a sort of nucleus that stays in place, while economies orbit it. If one starts to go out of wack, and its orbit becomes unstable, it may SEEM to that economy that the nucleus is the one moving crazily, but that is just an illusion.
except i use dolla to buy gold, hmm -lower price moar gold, sorry, but tried to buy dolla with gold-nobody wanted my gold. oh well, think i'll just hang on to my gold as no one appreciates my little round shiney gold colored piece of gold. maybe they think it is fake...haha...
serious comment;ha,yea right, is support broken with close below 1180? next level of support is? can't remember...
Support: - 1181.20(main).Break of the latter would give 1168.34, where correction may happen. Then goes1156.72, where correction is also possible. If a strong impuls, we would see1147.26. Continuation would give 1136.22 and 1127.03.
so there u have it - down the ladder, don't fall, one carefull step at a time...
The gold aficionados on here are basically a religious cult, there's no rationality to it. Every time gold dips there's people on here 'bragging' about how much gold they're getting for 'historically low' prices and going off about how they don't care about the 'paper' price. Yet any time that paper price goes up they sure celebrate!
The bit I don't get is how none of them manage to make the connection that the pm companies are owned and run by banks...
Generally the overall argument for owning gold is sound enough, but people gotta chill the fuck out over the whole thing, get another hobby or something.
..and Japan isn't going to collapse folks.
"Generally the overall argument for owning gold is sound enough, but people gotta chill the fuck out over the whole thing, get another hobby or something"
IOW ~ "Embrace your slavery SPARTACUS", you were born into it!
If the Yen don't kill em, surely fukushima will.
Don't piss in my rice krispies. Better yet put a rad meter on them, we ain't checking our imports are we?
Gold Bitchez.... I pick up pennies
With the caveat that I own PMs, guns, and food, I keep paper dollars in a safe deposit box. When things go south, I know I will need them for a while (but not forever). That has generated nothing but HATE on ZH. I am still cool with my practice, so I plug along. ZH tends to have an interesting crowd which is usually biased (but generally smarter than your average bear) and fairly negative (rightly so in my opinion).
You have an ass an it is your ass that will pay when the shit hits the fan. Listen, learn, and even respect, but in the end you gotta buck up.
So, who gives a shit about the gold bugs, the dollar bugs, the stock bugs, the bond bugs, the FX bugs, the derivative bugs, and so on.
Cover your own ass. And if you have a strat, share, even if people down vote you.
Regards,
Cooter
I have a tele not a strat
One of the consequences of going down the rabbit hole is you discover everything has been inverted. You where already in the rabbit hole and now you are outside blinking in the light. Gold is the best proxy for pricing everything else in. Its virtue is that 1 once of gold is 1 once of gold regardless of where a person is.
Gold as money is only a convenient proxy for human endeavor, our time, energy and creativity.
It's a no-brainer to me. Regardless of any other beliefs I may have, it seems VERY likely we will suffer a major crisis with our money. If that is so, then I may need to be able to segue from one system to another, very quickly.
The ONLY thing that has been able to do that at all are PMs. Not only this, but they have done so pretty consistently for 5,000 years. PM's have actually been the only money ever used to survive down to the present day. They have outlasted all attempts to replace them.
Like I said, a no-brainer.
Fiat won't go down without a fight. Since it is now in control, it will do whatever it can to keep real money in its place.
But this can only work for a short time. But PM's haven't seen their lows, I think (hope). I think there will be a last, really desperate 'Sonny Corleone' style beatdown of PM's before the snap-back.
According to the news here, it looks as if Sonny may have begun slamming gold with a garbage can lid...
QE3 just ended this week. It'll drop the rest of the year. Then, hard short covering in Q1. Gold vs. National Debt will be at a 50% discount by Yr end(-$1000/oz.) Silver, around 12.
its simple, deflation. the velocity of money is slowing. There is too much debt. eventually this will lead to a epic wave of money printing, more than we have seen so far, as the major currencies begin to competitivly devalue their currencies, which is when gold and silver will shine. No idea when they day will come, but until then, enjoy being able to aquire physical at these prices. Im not buying any more just yet, i think they have further to drop.
I agree with you, but it's going to be a hard sell (the fiat firehose) if it doesn't get into the hands of Main Street. At some point I expect a virtual helicopter drop. A $1k Visa gift card in every mailbox for example. And when people hold onto it, buy PMs, or pay bills. The facade - the Kabuki Theatre - the matrix - will burn. There's been so much information held back by the media, it will hit the majority like a 30-06. Maybe something better is on the other side, if calmer heads can keep a grip - and all the 'financiers' can take their lumps, lick their wounds, and shove off in peace (probably able to keep their ill-gotten gains, cuz nothing we done was 'illegal' yet).
I comprehend what you are saying Carl. What confuses me, is the author says that massive Yen printing is leading to deflation, wait, what?!
Exportation of deflation from Japan to rest of world. It's the reverse of the inflation that will hit the Japanese. What the author didn't/couldn't take into account is when the Japanese people have had enough punishment. Sky high energy prices in winter will do it, if anything does. If that happens, the tide turns back like a Tidal Wave.
In currency wars, the devaluation is competitive. By this I mean that as one fiat changes, it affects another fiat currency inversely (i.e. if JPY goes down, the dollar goes up).
Example:
If you buy a Toyota or a Ford truck, and the USD/JPY (or JPY/USD) is 1:1, and your Toyota is 20k USD, the price is also 20k JPY. But, if the Bank of Japan decides to print a shit load of JPY, and buy some assets like bonds, stocks, or hookers/blow (you know its really the latter), then the relationship, the FX rates, changes.
Then, the USD/JPY might be .8:1.2. You can flip this around, the but the relationship doesn't change. What this means is that in USD, that truck you wanted only costs 16k USD (i.e. 20k * .8 - or deflation). On the Japan side, that Ford truck they wanted is now 24k (i.e. 20k * 1.2 - or inflation).
So, if you are Ford, your sales are going to tank in Japan. If you are Toyota, your sales are going up in the US. The US has less jobs and less exports, Japan has more jobs and more exports.
This is a *CURRENCY WAR* because all that is changing is the value of currencies due to the behavior of central/national banks.
What was posted, originally, is that the US has been printing and exporting DEFLATION to Japan for many years. The original post argues this is reversing and DEFLATION is coming back to the US.
How is your local economy? Ready for shitty domestic sales and cheap imports?
Regards,
Cooter
Agreed. I only have about 8% in physical gold/silver but looking for BOJ/EURO to drive it down a bit further and increase to maybe 15% end of year.
The Central Bank of DoChenRollingBearing has about 11% of its reserves in physical precious metals, almost all gold.
The Bank bought a small amount today.
Do you hold hard paper DCRB? I mean out side the banks.
Regards,
Cooter
Roger that, Cooter. Long green in $20s and $100s. Because you never know...
Regards back at you! Good weekend!
I bought a couple oz. today. Lines and big cash going across counter. Not 1 seller did I see. Big cash as in 50k transactions.
Just like they limit .22lr, maybe they limit Gold? I can afford to lose a couple hundy an oz., if I couldn't I shouldn't be in it.
I bought today as well. But, over the past two months or so, my experience at the LCS's has been LOWER than normal PM buying. Just my experience.
Hmmmm. Debt Jubilee for General Motors.
Hmmmm.
That sounds like cars that can be had for an ounce of gold...which sounds to me like your gold which you would never part with or trust in anyone else's hands is WAY over valued.
We'll see...but if General Motors starts selling their full size pick up for the cost of production "for fear of the all electric variant" that would mean a brand new full size for under ten grand.
You can by a perfectly functional used Class VIII tractor for twenty grand.
Properly equipped that machine could tow 120,000 pounds...
Purposeful conflation of at least 99 parts paper for every one part physical.
Allowing the COMEX to set commodity prices is like using a game of Monopoly to set Atlantic City real estate and rent prices. Totally disconnected with reality. Quite literally just a game.
goldopoly; sell park place and pass go and order the train for a pick up at jamies beach house...
Um, you just contrasted Monoply (the board game as opposed to the Elites-fuck-the-american-people-for-real game) to what?
Regards,
Cooter
This tells me someone's a bit edgy re: the Swiss Gold Referendum.
+ 1, should that be + $55,000?
The Swiss Gold Initiative promises to be an interesting affair if passed.
I look at it this way. If people are stupid enough to give me gold/silver in exchange for a piece of paper with green food coloring, I will take that deal all day long.
In a real deflation, which is what Edwards is predicting will happen, "fiat" as you call it appreciates in value, as borrowers scramble to acquire "fiat" to pay back their loans. With huge leverage in the system, and further lending hampered (lenders unwilling to lend more into a deflation) the demand for "fiat" increases and the supply decreases (remember lending creates "fiat.)
That's why PM's are getting hammered today and have been for a while as well as crude and other commodities.
+ 1
Holding some extra FIAT$ is a good idea. Diversification.
Good comments on this thread tonight.
Confirmation bias in action! Agree 100%!
I started by getting bullion, but after some time I realized cash is nice too. Paper cash and new, fresh bills with all the countermeasures (<wink>BenJe</wink>).
Regards,
Cooter
That's the only dip you should be buying.
Paul Volcker said it - central banks are in a war against gold. If gold becomes recognized for what it is, a store of wealth that will be here long after these fiat currencies are gone, then the reserve fiat dollar system is over. They will fight until they're out of ammo. They would far rather the Chinese buy the gold than for gold to go on a tear and take apart the dollar system. If you choose to hold physical metals - be mentally ready - this is a war. Before it's over you'll be labelled a criminal, a terrorist, and they'll try to sieze it. Decide now, before it gets bad, are you going to keep it when they make it illegal? If you're not, don't get in, you'll lose. They will use every tool in their toolbox to defend fiat dollars. Are you willing to go that deep?
Correct.
All of you ZH'ers who think that suddenly someday your gold and silver will be worth tens of thousands of $$'s are crazy.
You will be labeled as evil speculators who unfairly profited on the collapse of the US Dollar (and subsequently, the collapse of the US economy). There will be a 99% capital gains tax placed on all precious metals. Wait and see.
PM bugs are no more evil speculators than say people who bought houses because housing always goes up.
Stop thinking rationally - do you truly believe that the remnants of TPTB will allow those who prepared for the collapse of the petrodollar to profit from it? LOLOLOLOL. At BEST, there will be a heavy punitive capital gains tax. At worst, trading in gold and silver will be banned completely, and declared worthless by TPTB.
Our real problem is not currency or even economy, it is government. Government is creating the rules and conditions causing all of this and as long as they can retain power they can decide, legally, what gold or oil or the dollar is worth...from the end of a gun if necessary. We are trapped. There is no way out. At this point I believe virtually anything we can do has been fully anticipated and planned for if not deliberately incentivised. Circumstances may well spin out of their immediate control but I imagine they have contentions on that as well, calculating how they can profit or otherwise acquire power from it. Pessimistic is not a strong enough word for how i feel, and as a boomer and citizen, I must accept responsibility for it. I, like so many others have gone along, knowing, I think, in my gut that it was all wrong. But I wanted to earn, to win, to have all the nice things that one could have if playing the game. Now I see the end game clearly. I feel the manipulation in my bones.
I might be half your age, but I agree 100%. I don't really know where I can go at this point. All I can do is buckle down and hope for the best. Get out of debt and all that shit.
But, as I like to say, I am a tax donkey. When the govy needs more cash, it's my load to pull. I could move overseas, I guess, but they can still insist on tax filings (they do) and change the rules as needed. There isn't really any escape, despite the dope peddlers like Simon Black and Company.
You are one of the few, consistent, thoughtful posters left on ZH. Thank your for your contribution. It needs to be said, even if folks don't like to hear it.
Regards,
Cooter
Dear Cooter,
Get out of the USSA. Take an in-demand skill somewhere that pays, and isn't filled with shitty people. First five years you'll usually have to work a jobby job for a local company, but if you're good at what you do, you can gradually build a private customer base in a profitable niche. Get paid in cash, write no receipts. Keep your savings in the Bank of Precious, and keep quiet about what you're up to.
Learn the language, but in public, pretend you don't understand it. Malicious People will reveal their intents and weaknesses very quickly when they think you can't hear them. Friendly people will likewise reveal their beneficial natures. In official business appear humble, concerned, helpful, but bumbling. Local government sheepdogs love herding sheep. Act like one while you're spotting the holes in the fence.
Five more years...Keep building, keep networking. As a foreigner, you will be able to take some rather oblique approach angles to powerful/connected domestics. Hold their curiousity, and build a relationship over time. They will introduce you to other useful people. Eventually, you may be able set up a legal shell to stand in as an owner instead of you. Be as poor as possible on paper, while still visibly earning just enough to keep your working visa in good health.
What you do about your US tax donkey status abroad is your business, but.. US tax liability occurs after a certain income threshold is breached, and if you're doing it right, you will have very little income, and no paper trail.
Some countries will offer a second passport if you marry one of theirs and make some babies. And most foreign women make better wives than Americans anyway. Choose wisely: there will be some "free" p*ssy about, but having a woman who makes a difference in your endevour is the best. Her ability to navigate local social mores and open doors may prove the difference between success and starvation. Once you've got the 2nd passport, you can dump the liability that is the USSA as soon as your personal circumstances make it worthwhile to do so.
Make no mistake, it will take years. You are crossing the desert. It will be hot, it will be cold; you will be exposed. You will live among an alien people, and most of them will offer no shared experience, sustenance, or even relevance. You will leave most of your present life behind, and there will be scarce opportunity to recross and return. It is rarely easy and never without risk. Simon Black and peddlers of "Turnkey 2nd Citizenship Solutions" will not tell you how hard it can be.
But- a Real American lives by his brains and his balls, and if your ancestors had it in them, then so do you. I hope this finds you, and I hope it brings you possibility.
All the Best,
Beef
DP
Still be a black market for it and you can always go precious stones (i always have some around and do a bit of trading on raptor.net) and have been doing a nice side business purchasing 2-3 rovers at a time with my cousin, restoring them to customized specs, and then shipping in us, canada, mexico, and in a few cases latin america. profit on them varies considerably but solid cash business with hard assets and good supply chain set up. just won't deliver down to mexico.
During prohibition alcohol was illegal to make, sell, and consume. Yet society valued alcohol more than the possible punishment from the state. Even cops and judges ignored the law because they desired alcohol more than the possible punishment. This is how I view PM's. Society will place such a high value on them during the collapse that everyone will ignore any and all laws that the state tries to impose. The Black market will flourish, and people will freely trade PM's without real worry of prosecution.
We are just like the Palestinians hurling rockets back at our torturing captors.
I wouldn't make the assumption that there are many ZH'ers who believe that they will turn their pm's in for any amount of Federal Reserve Notes. Why give something up for a failing currency. No thanks. My stash is for when "King" Dollar is exposed for what it really is.
Try that in Switserland donutboy.
Funny to see the declining Ruble get all the PR......
I don't understand the part where gold and silver get hammered vs fiat.
1.-CBkster's are powerful and have LOTS of resources
2.- PM = small markets (can be manipulated... see # 1)
3.- USD is the currency ot... international trade... purchasing oil... general reserve (creating a base demand reflecting the current strength *not to mention it is god for the banksters and fiat issuers
4.- there is NO alternative to replace the USD
5.- while in principle i agree on the principle of PM being "store of value" in practical terms, such concept has an uphill battle against all of the above that creates an advantage to the specific FIAT of the USD.
6.- ekonomist -who unfortunately advice the idiots (politicians) are a bunch of purchasable whores whose theories are idiotic and given the last few years, such theories have proven to be LIES....
economist: a pseudo-scientist (or so he/she believes of himself/herself) who pursues to prove that something that works under the real world, does NOT work as a theory
But Bastiat -you're talking about fiat gold v fiat. They will both go to zero.
the dog doesn't understand everything that goes into feeding it, it just eats. similarly, people just use the currency they get and are dumbly satisfied as long as it gets them stuff.
the reality of zero intrinsic value will be quite a shock, to say the least.
Japnese younger than 30 hold no hard assets other than their smart phones. When the yen's value goes to .001 of what it is, they will rampage Tokyo and head to the Diet. The young are not as docile as their parents.
I'm telling you, the end of quee at the Fed, and more quee at the BoJ are linked. It is smoke and mirrors. This either coordinated, or it is war. It is hard to say which.
OK, I admit it, I don't know shit about forex, yen carry, or any of that. I am bashing around on the internet trying to get up to speed. I suspect that ZH is like 7th graders talking about sex- most of us are completely ignorant, but not wiling to cop.
So far, what I'm getting is that there is a DIRECT LINK between Treasuries and the Yen/Dollar carry trade. Linked? Fuckin'-A bitchez.
How does it work? Er, I'm not sure, exactly. That's why I'm a farmer, not a trader.
I think, fuzzily, that if the yen is pushed lower in ref to the dollar, that allows traders to borrow yen and buy Treasuries on a 10% margin. So they borrow money and then borrow more money with the borrowed money. OK, whatever, they are experts and understand all of this better than I do, right?
Someone please correct me before I hurt myself, but I'm plunging in.
If the BoJ buys shit-loads of Japanese govt bonds, that drives the yen down relative to the dollar, towards 120 according to this chart.
That means that the "experts" will borrow lots of cheap yen and use that money to buy lots of US Treasuries on margin. Who does this help? the FED, it seems, and the predatry banks, because the Fed just stopped QE, and they are rightly afraid that stopping QE will caue a stall in the price of T-bills, unleashing an orgy of bond shorts- not good.
So, somehow in the next 48 hours, the BoJ miraculously comes to the rescue, and QE's all over the place, thus rescuing the Fed from any ill consequenses of its own lack of QE.
Of course, there are all the other unintended consequenses of a falling yen that will fuck up China (ghost cities for sale! cheap!) and Germany, but these are longer-term, and hopefully can be dealt with by another kick to the can, ie MOAR QE.
sigh... whatever.
So my real question is: What does the US Fed have on the BoJ to make the BoJ their little bitch? Could it be that BoJ is junior Rothchild (Belgian Lambert) subsidiary to the Fed?
What does the US hold over Japan? I've wondered the same for about a year. My best guess at this point is that it goes back to WWII reparations. But it doesn't really matter why, not for Japan and not for the US. It is what it is.
Nice rant. Lots of questions, so few answers...
To be honest, you must understand there is nothing to understand. The central banks make shit up as they go about their day. Its their game and their rules. For instance they have a new little game they like to play. They break the exchanges for a few minutes now to ramp prices upwards when coming back online. Just look at the zerohedge articles. A shit load of outages over the past few weeks anytime the banks need a liftoff.
In summary instead of understanding what they will do next because it is impossible to figure out, Hedge against these assholes. They will either fuck the world up accidentally or intentionally , and that is the only guarantee we can make.
Do you really think the CBs are just winging it? Or are you just trying to sound sophisticated? Or are you just confused because you don't see what they see?
If I owned the Fed I'm not sure I could come up with a better plan to enrich myself, kill my competition and leave everyone in the dirt for the foreseable future. It's fucking genius, from a certain perspective.
Confused???Nah. If you really believe you know exactly what they will do next I have swamp land for sale.
I do agree with you about it being a brilliant plan. My point was we all guess what they will do next. Look how many of us figured the party would be over by now. The music is still playing.
Wake up and look around when the King of Saudi Arabia kicks the bucket...
Nice post. I would fall on the side of the Central Banks will fuck things up accidentally. Most on here assume these assholes are almost "Godlike". Horseshit. This whole notion that these dikkhedds have this great inpenetrable scheme will vanish like a fart in the wind, most likely overnight. They are fukkin crooks. Let's not crown their ass here.
Bretton Woods.
Interesting, thank you.
mccormick # 9
WOW.... you have a VERY promising carreer as an ekonomist !!!!
These alternating cycles of Inflation and Deflation remind me of similar cycles I do:
Inhale, exhale. It keeps me alive.
Don't get wrapped around the axle with fiat currencies that are like Bungee cords stretching wrt to each other, or Reference Frames that are compared to each other like comparing sheets of floating ice.
Instead, track and 'GPS' them to absolute coordinates: Gold. Use the GOLD PRICING SYSTEM -- the other GPS -- to get clarity and keep your sanity. Bitchez.
Sino-Japanese War v2.0
Yes, exactly right.
+ 1
Japan is going after Chinese exports. Our bearing import company in Peru will be studying carefully...
The part people don't understand is that the timeline for all fiat to go to zero is potentially so large that it is essentially meaningless.
A pile full of elephant excrement
The currency war? The Japanese economy? Albert's opinion?
BOJ is simply deterring attention from what is actually happening that is important: NY Fed is draining dollars. DXY is exploding higher
"NY Fed is draining dollars", they have a long, long way to go if that's the case, don't know if't is possible, something about dominoes with Japan on one end and America on the other.
You and I both lnow that the fed is not draining dollars.
More leaks.
Military has expanded the revolt.
Obama presidency could be in borrowed time, unless he changes
Here is where I agree with you. The military backed Palin/McCain back in 2008. When Palin turned the narrative to Russia with her remarks ("she could see Russia from her porch), she was talking MIC propaganda.
The conflict with Russia was supposed to escalate a while ago but Obama's backers had other priorities. The bottom fell out of the economy and the one side wanted to use the opportunity for a massive war effort and getting the economy back on track. The other side opted to try and print its way out of the mess via coordinated central banking efforts as is the status quo.
QE has ended. Obama has been told to re-engage Russia and the CIA is already laying the groundwork for the coming war all over the world.
Nice friends you got there in high places, ekm. Hope they look after you when SHTF.
I have zero inside information. I only analyse leaks to the media.
It's a hobby
Your call on oil was about 6 months early but it happened in the end.
Not sure why you're carrying the water for the American elite establishment though.
No way around elite.
Civilization is inherently 'rule by elite'.
The only issues is: Which elite
Or as it used to be known - choose this day whom ye shall serve.
Given that it was Tina Fey not Sarah Palin who said she could see Russia from her yard.........does that make NBC the shill for the MIC?............or do you have a different theory?
When Palin turned the narrative to Russia with her remarks ("she could see Russia from her porch), ...
Did you forget the sarc tag, or do you really believe this?
That was Tina Fey who said that -- not Palin.
Palin never said that.
by "draining" they are most definitely printing and converting to currencies via the PDs.
The fed is not draining dollars, we still have zero interest rates. The Japanese are simply printing faster than the fed.
Warp drive Mr Chekov...
But Captin, the mains are criss-crossed like a Christmas tree. The engines can't take much more.
Dammit Scotty....
Further down the script -
She's dead, Jim.
LOL! :-)
Dammit Jim. I am a Doctor, not an Economist!!
Scotty, I need Warp-P now!!
We're doin' the best we can, Bernan-erYell'n, but the warp on the presses is out of control and I am afraid she'll rip!
Get going or we'll go through Zero!!
That's funny. The bank wants 6% from me and I am low risk.
You are not the beneficiary of zero rates, banks are. They borrow at zero and lend to you at six. That's how they make "money".
I wasn't put on this planet just to make money for bankers! Oh wait...
Everything that happens is because NY Fed is drainign dollars and Arabs in Pentagon are contracting hits on Bankers.
absolutely correct
And if you do not like my posts, please get a life and ignore me
No Fight Club? lol
Rats.
We have redesignated this place as "Pillow Fight Club"courtesy oof LetThemEatRand.
:-)
xoxo
like it, guns vs money, i'll take the loaded guns every time. shoot the wad, no aint gonna work jamie, but if you hire to fire back, now that is a workable strategy...
Are you two guys the same person? Or maybe you are twins. You seem to speak that weird "twin language" nobody else can understand but you.
no
I think my head is going to explode, but I'll try to maintain.
take a deep breath and relax. just bullshiting about shit we have zero control over. just wish/think bullshit. ekm is on to something. the pentagon/dc power struggle behind the scenes, makes perfect sense to me...wtf do i know, haha, shit for brains says, think again...
Pentagon/WH power struggle. This has been a Sorcha Faal meme for several years now. I can dig it, hepcat!
so, Albert, you're saying BTFD? cuz all I'm hearing to today is "this shit is bullish as fuck™"
Gold is SCREAMING that we're headed into a deflationary collapse and no one seems to care -
Because 99% of the population are not going to complain about cheaper food and fuel.
Pretty fucking simple really. 99% of the population could give a rats ass about paper bullshit and financial "products" of mass fucking destruction. 99% of the population lives in the real world, not the paper/digital fantasy world motherfucker.
FYI- the PMI numbers out of chicago do not scream "deflation".
Shit, no fucking surprise there.
You are 100% on the "ppl don't give a fuck about fake ass investment paper".
Also correct on the ppl will love the deflation.
My question is:
Does this mean Japan is positioning itself to be an importer of goods from those that suffer deflation as a result of their policies?
I.E. Buying up loads of commodities (ore. coal, wheat, etc) similar to what china has been doing? Maybe purchase some advanced weaponry at a cut-rate price too?
Just a thought.
If you were a country that had no more natural resources left, but still needed to feed cloth and employ your citizens and you could create digital/paper claims for the real assets (or had a friend that could for you) that make your goals possible, why wouldn't you?
I was looking at it as a way (maybe even a screen) for Japan to step up it's preparations for conflict?
War isn't cheap.
Deflation, it's what's for dinner.
My theory is that we will not get moar (US) QE until folks beg for it. That's how it works. The final enslavement will occur because people ASK for it. And at that point the Fed will faux-begrudgingly acquiesce.
In the meantime, what entities are holding beacoup dry powder? If you guessed US TBTFs you're correct. So when the final blue light special sale for energy, mining and other companies starts guess who will be feeding at the trough?
Someone cynical might think this was all engineered as a huge asset transfer. And to think, some people think the Fed doesn't know what it's doing. THAT is fucking laughable.
correct, ave pay 250k, staff for staff for research, research and moar research. they know every shit you take, and if not one call away to nsa shit team...
".......because people ASK for it....."
"..........as a huge asset transfer......"
" Blue Magic "........
".......And to think, some people think the Fed doesn't know what it's doing. THAT is fucking laughable.........."
Indeed.
How many babies are being born in Japan these days? Do you really think they can afford to conscript their current male population and put them into a meat grinder?
Deflationary demographics. FUCKING OLD PEOPLE WON'T FUCKING BORROW MONEY!!! FUCKING DEAD PEOPLE BORROW EVEN LESS FUCKING MONEY!!!
WHAT THE FUCK IS WRONG WITH THEM????!!!!
I HAVE A FUCKING ECONOMY TO RUN HERE! CAN I GET SOME FUCKING HELP, YOU FUCKING DROOLERS???
FUCK!!!
Respectfully yours,
Haruhiko Kuroda
you'd think everyone has forgotten that Japan is a vassal state... and from the looks of most of these comments, many have
Yah, but once they cash in that SPY share to buy a barrel of Snickers, it's game over.
Japan is exporting it's deflation to us. Try to keep up.
What deflationary collapse? This is pure fantasy dreamed up by academics and elites to scare people into thinking that the strengthening of their currency is a bad thing. It's not.
yea, thats the spirit F-Tipp,.... Happy Days Are Here Again
Good Gawd .... whooda thunk the euro could even remotely be considered a much cleaner dirty shirt. I give up.
Just you wait.
I'm pleasantly long one unit of JPY in Zimbabwe terms.
- Dennis Gartman
im thinking i will go long lottery tickets, with perhaps 1/3 of my portfolio being dedicated to trying my luck `at indian poker. diversificaion....
Not only will the East export a massive round of deflation to the west, but the effects will be amplified by magnitudes due to the rapidly strengthening $usd from all the money printing.
Whose printer is faster?
So, what's an investor to do? Does anything benefit from all this?
You'd think gold would, but... 1171?!
You could simply go long USD/JPY, but, well, that trade's not known as the widowmaker for nothing.
Anyone? Anyone? Bueller?