USDJPY Tops 114 (+6 Handles) Sending Japanese Stocks Up 2000 Points Since FOMC

Tyler Durden's picture

The trend is your friend... until it becomes a Venezuelan hyperinflation melt-up...

 

USDJPY just broke 114 - now up 6 big figures since before the FOMC. The Nikkei 225 futures are now up 2000 points since then...

 

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A gentle reminder from the past...

Amid the euphoria... Kyle Bass provided a few minutes of sanity this morning in an interview with CNBC's Gary Kaminsky. Bass starts by reflecting on the ongoing (and escalating) money-printing (or balance sheet expansion as we noted here) as the driver of stock movements currently and would not be surprised to see them move higher still (given the ongoing printing expected).

 

 

However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed. Investors, he says, are "too focused on nominal prices" as the rate of growth of the monetary base is destroying true wealth. Bass is convinced that cost-push inflation is coming (as the velocity of money will move once psychology shifts) and investors must not take their eye off the insidious nature of underlying inflation - no matter what we are told by the government (as they will always lie when its critical). Own 'productive assets', finance them at low fixed rates (thank you Ben)...

 

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Money does grow on trees - well manicured little trees...

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firstdivision's picture

Anyone know what the explosion on US markets was just about, fat finger?

spastic_colon's picture

elections, everything that kyle bass said, and the markets were red....just to name a few

 

oh and i forgot, banker bonuses dont top out until the GS 2050 number, so theres that too.

Four chan's picture

"Catch a wave and you'll be sittin on top of the world?"

 

for surfcat my cs buddy.

TruthInSunshine's picture

Go! Go! Kuroda!

Wonder twin powers, activate! Form of a Mushroom Cloud!

Make_Mine_A_Double's picture

120 and beyond bitchez...

Given that NE Asia is already a nationalist tinderbox this currency war is very likely a prelude to the real thing.

 

TVP's picture

trade wars, currency wars, world wars...

DetectiveStern's picture

I hope so. Plus500 offered me £20 to sign up. Just call me the Wolf of Skid Row.

lasvegaspersona's picture

The ironic saving grace may be that the currency is in ruins before any other country can respond. At the rate they are going it will be over by Christmas.

No one is upset with Venezuela and it's TP shortage. 

My hope is that China sees where this is going and along with Russia is more focused on the coming changes in the monetary system. We should see moves to transactional currencies with no false promises that they will be maintained in a way that encourages saving in them.

The secret is hidden in the structure of the Euro...gold on the balance sheet marked to market. The actions of the ECB (NIRP and Cyprus bail-ins and no VAT on gold) suggest that the ECB is managing the currency in this way. They are not going to sacrifice it to please a few inept leaders in the various socialist paradises in the EZ. If they buy massive government bonds then I'm wrong but so far all Draghi has done is say 'maybe some day'. It is kinda the way you talked to small children.

TruthInSunshine's picture

China will have no choice but to devalue the CNY as it is even more
dependent on exports as a % of its GDP than Japan is.

Watch what China does, not says.

At this rate, currency volatility is set to explode across the board. It's not even up for debate.

Japan has launched a real currency war here, especially vis-a-vis other export dependent/intensive nations.

bwh1214's picture

As far as I've seen, Kyle Bass's intuition and incite make him the smartest guy in the room. 

HardlyZero's picture

Crack up boom, shaka lacka, boom shaka lacka.

Kyle Bass has good timing now, and I hope going forward.

Will these FX effects affect EURO or EMs ?

hobopants's picture

I never hear him mention Gold and Silver anymore...but I guess anybody(Greenspan) would look like an idiot bringing those up right now.

IronShield's picture

The Japanese version of soup kitchen; Bento Box kitchen!

HardlyZero's picture

Meltup-shima...(vs. the radioactive hot melt-down)

Its upmelted Cheese Toast.

Soon everone will be toasted or fried.

Atomizer's picture

FOMC carry trade me on a amusement unicorn ride. 

Magic mountain rainbow digital printing thrill ride. Comrades!

Bay of Pigs's picture

As most ZHers already know...this is QE 4.

lasvegaspersona's picture

Nooooo we don't...we think it is QE 5...but maff is hard so you could be right...who is counting anyway.

Colonel Klink's picture

I think we're turning Japanese, I really think Asshole!

ebworthen's picture

30 years of saving and you will get a 3-egg omelet in return.

Amurika!

kowalli's picture

i think you got nothing

ebworthen's picture

Overcooked "Egg Beaters" omelet served at the FEMA camp.

Cholesterol and all that, no tobacco or booze allowed, chain gang.

Hulk's picture

No Booze ??? Thats it !!! I QUIT !!!

Panic Mode's picture

An audience asked Kyle Bass what the first thing he would do if he is the head of BOJ. He answered without a heartbeat, "I quit".

Like he said, "Borrow yen and buy gold".

HardlyZero's picture

At some point in the future it might be useful to turn plastic into Gold, then exit stage left.

Modern financial alchemy !

yogibear's picture

The Federal Reserve's grand printing experiment is Japan. 

It's called the Fed's version of the Zimbabwe economic plan.

The US is following Japan, but it's bigger.

disabledvet's picture

Debasement doesn't mean you're out of options. Hljaldimir Schacht...who was in fact American..solved not only Germany's hyperinflation problem but even found then MONIES for total rearmament!

This did get him a sear at Nuremberg...but he was acquited as well.  Ate a sandwich after the verdict got read actually.

When Goring took over the Nazi economy had huge labor and material shortages.  Needless to say "they did a poor job of importing labor."

So has Japan.  So they have EXPORTED capital to raise dollars.

That says to me "hyperinflation."

Bell's 2 hearted's picture

wait till rest of asia responds to this move

TruthInSunshine's picture

China fleaking mad, bro! China going to debase-a da currrr-in-seeeea immediarately!

bbq on whitehouse lawn's picture

Maybe because nobody is buying anything made in Japan.

Bell's 2 hearted's picture

 Bass is convinced that cost-push inflation is coming (as the velocity of money will move once psychology shifts) 

Debt overhang says otherwise

 

 Deflation in the cards (first)

 

 

gatorengineer's picture

would love to know what he thinks will change the psychology.... Spend it or its worthless?  If I spend more the giverment will give me more?  I dont see the paradigm shift required.  Lending by any objective means is tanking....  The only way I see to get more money flowing is to raise college tuitions as that is a basic human right now apparently.

If the Dems somehow hold the senate this thing is going through the roof (lots of new citizens to shower with gifts).  Otherwise bombs away.

 

Renfield's picture

Downticked you both (altho I like both your comments 99% of the time) b/c even tho I'm glad to read your comments, I simply disagree.

We've already had a conversation in our household about whether keeping a (small) cash savings is worth cutting back on food. We elected to spend on MOAR food... more supplies... more non-perishables... more booze for barter... more stock-up stuff. Already spending on stuff that'll probly be waaaay more expensive in a month. Our food bills, esp. real meat, cheese, etc. & not pink-slime subs, have been going thru the roof even before this move.

Thank God most of our savings ain't in fiat. The only people getting Chrissy gifts this year are the small kiddos.

Nothing sophisticated here, obviously. But speaking as one of the great unwashed masses, those whose psychology you guys are speculating on, this particular common worker family can see the shift in psychology from here. Wage inflation only counts if you have a job, and it don't keep up with the bills at a certain price inflation level. I think we're about there.

(PS: of course that's not counting deflation in big-screens & ipads.)

Bell's 2 hearted's picture

thanks for the feedback

 

long story short

 

US headed for bad recession (and sooner than most think) ... pricing will take a hit (as always during a recession)

 

after that?

 

a lot will be determined by policy choices

gatorengineer's picture

Question is what policy choices, I really dont see any?  Do you think there is a fiscally responsible R or D?  I think its only a question of whether we crawl over the cliff (R option), or go out in style and more spectacularly (cash for clunkers 2,3,4, payroll tax cuts etc).....

Bell's 2 hearted's picture

fwiw, i think we're headed for typical inventory correction led recession, which will likely morph into financial crisis.

 

i think for political purposes 1 or 2 TBTFs will have to be taken down/broken up in order to bail rest.

 

response probably like last time ... fiscal measures mixed with more QE (and blowing bubbles ... again).

 

think we're on permanent boom/bust cycle

Make_Mine_A_Double's picture

Ain't that the truth - I work with some of the big importers and these guys are ALL IN on inventory.

If this Xmas isn't a barn burner (and quite the contrary it's going to be a huge bust near is I can tell) these guys are going to be stuck with inventory until 2016 and a few big names will go down end of Q1 15'.

You would be amazed how many people are smoking the Fed bullshit on 'economy at the breakout' - people in the business that should know better.

gatorengineer's picture

batlic try up almost 50% in ten days.... either its china all in on cheap oil, or wallyworld revised its xmas forecast something happened in a big way.

Make_Mine_A_Double's picture

I saw that and I can only attribute it to ChiComs bargin buying oil - otherwise there is so much capacity floating around it doesn't make sense.

Our ships are full but this will end shortly. We even sent in a few charters to scoop up PRC exports to MuriKa imports since we're getting top dollar.

This will not last though since if it's not already on the water by end of this week it will not make the distribution cycle for the holidays.

After that...watch out.

If I'm wrong and sheeps go apeshit and blow the mall doors off buy shit for Xmas than I'll drink the Kool Aid myself and shut up. But I don't think so.

HardlyZero's picture

BTW as the fiat currencies flux-ate...and soar and dive, their stock markets will do opposites.

So is it best to short/buy the stocks or to get Gold or both ?

gatorengineer's picture

I agree with you that I cant see the shift in psychology, no arguement there.  Family went on Defcon 1 this weekend with monumental cuts to the company I work fors 2015 budgets, last week and likely my job in the process.  I have a few thousand rounds, and had some small amount of now overpriced PMs until a recent boating accident, have had a cabellas grinder for a few years now, making our own burger, we make our own bread.  Not much for christmas this year for anyone.

Mainstream media liberal and conservative have never banged the drum harder that all is well. From Drudge to Huffpo the message isnt that different.

Took a walk at lunch around the town I work in, never saw so many store fronts empty, local mall has record empties less than 60 days before xmas..... This isnt going to end well, but the question is how much longer can they keep it up, and will the market necessarily reflect the depression?

 

 

Bell's 2 hearted's picture

until i see evidence of legitimate wage gains i see no (sustainable) cost push inflation ... sure they can pump it (ala 2008 when WTI almost hit $150/barrel) ... but sustainable?

 

i think any move UP will be met with drop in demand ... gains in productivity should lead to natural rate of DEFLATION ... banksters are fighting this (poorly) ... and with debt at astronomical levels?

 

Deflation wins (for now) 

Atomizer's picture

BOJ can add another zero to their currency and look bitch rich.

bnbdnb's picture

Japan, welcome to the 51st US state.

Panic Mode's picture

These japanese people don't realise that they are brewing a nuclear paper mushroom themselves. All their wealth will get swallowed up in the mushroom cloud. Japan already has the highest suicidal rate. Imagine what will it be like when this SHTF.

gatorengineer's picture

look ripe for a short squeeze yet?

Atomizer's picture

A japanese soup bowl will cost ¥250,000. That's real inflationary growth. Fudging derivatives is a bankers ass redeeming hockey stick dilemma. 

geekz_rule's picture

I wonder.. is this nippon telling the world.. look.. fukishima is way way worse than you will ever know.. so.. we just dont give a fuck anymore?

lasvegaspersona's picture

All my reading has been about the hyperinflations of the past. How exciting to get to watch up close and in real time....go Yen go!

jubber's picture

you know that interview is 18 months old