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PROOF: While The Bank Of Japan Goes 'Full-QE-Retard', Japanese Investors Are Hoarding Physical Gold
Japan’s Prime Minister Shinzo Abe has had an extremely busy past few weeks. After increasing the sales tax rate earlier this year which caused the GDP to contract by more than 7%, the Bank of Japan announced earlier this month it would step up its game and print money like never before. In a previous column we explained that Japan would print new money at twice the rate the USA was printing cash at the height of its quantitative easing program.
Even though Abe’s economic policy (called Abenomics) seemed to be working in the first phase of the implementation, the progress has stalled and Japan is now back in a recession again. This could be a huge indication that Abenomics is quite dead. In an attempt to resuscitate the policy, the huge money printing program has started and Abe has announced he would postpone a planned increase in the sales tax to 10% by 18 months years as the effect of another increase might have been devastating for the country’s economy. It was already quite weird for someone who wanted to increase the consumption pattern of the Japanese population to increase a sales tax (which obviously reduces the demand for goods) to get the country’s financial situation back in order.
Surprisingly enough, even though Japan’s economy is now officially in recession again Abe has called for new elections within the month. With Abenomics failing and the domestic economy tumbling back into recession, the central bank printing money like crazy leading to a severe depreciation of the Japanese Yen and an unpopular move to increase the sales tax from 5% to 8%, one would definitely not expect a democratic leader to ask the citizens of Japan to vote for him once again.
But Abe has effectively called for elections which will be held on December 14th which is in less than four weeks from now, now that’s an electoral ‘Blitzkrieg’! It’s also quite easy to understand why the sales tax hike has been postponed as the prime minister needs to make himself popular with his citizens. But more than anything else, the elections were called to take the left side of the political landscape by surprise. As elections are a complete surprise for everyone, the left-wing parties haven’t organized and harmonized their opposition against Abe yet. On top of that, with such a short time frame before the elections it’s extremely unlikely the left side will actually be able to organize themselves and take up the glove Abe has dropped.
By adding this element of surprise, Abe just wants to secure another term in office despite his failing economic policy. As he’s a real politician, Shinzo Abe is still upbeat about Abenomics stating ‘it’s working’ but he seems to forget that even though the unemployment rate decreased and the company’s revenues increased, there still isn’t a noticeable increase in consumption and salaries. Realizing one out of three promises isn’t really what you’d call ‘passing’ the test. It’s also a very wise decision to ask the Japanese population for a vote of confidence before the newly-printed money will be felt by the man in the street through an increasing inflation rate.
The ‘Abenomics -balloon’ is slowly deflating and Abe seems to want to secure his personal future before Japan’s economic situation deteriorates even further. The Japanese Yen has already lost 15% of its value in the past six months and with a failing economy and huge quantitative easing program we are expecting a further depreciation of the Yen. Meanwhile, the gold price in JPY has increased by almost 10% in the same six months, despite a 7.5% drop in the price of gold (expressed in USD). This once again emphasizes every decent investment portfolio should contain some gold and silver to protect yourself against sudden changes in the economic policy.
Our thesis seems to be confirmed as our research has indicated the total amount held in a physical gold ETF issued by Mitsubishi UFJ - "Fruit of Gold" - has increased exponentially since Abenomics went in full force, as can be seen on the following chart.
The amount of gold is expressed in grams. So whereas this ETF had roughly 1 million grams of gold in 2010 ( 32,150 ounces), this increased exponentially and almost eightfolded in just a few years time. The vertical red line is the moment the Bank of Japan started behaving irrational and you can clearly see the interest to hold physical gold has increased since then. The smart Japanese have mobilized their money and invested it in physical gold to safeguard and protect their purchasing power. And they are right to do so!
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Things are so strange right now. Gold and Oil are in a depression, yet demand is high. The job market is lousy yet the stock market is rolling along. What a mess. Oh well, might as well make money. Do any of you do PC builds? I just built a site which I think makes ordering the parts for your pc builds much easier. Check it out and help a fellow liberty lover! lol - http://amazonpcbuilder.com/
Dude, I just passed on a purchase of $160 Toshiba laptop at my local Office Depot. I don't need 5th laptop at home.
http://www.officedepot.com/a/products/355141/Toshiba-Satellite-C55-B-Lap...
Not only they were cheap - but available until the end of Saturday - because nobody cares about PCs any longer.
This is unprecedented!!
There was never a Black Friday weekend like that - that you could find deeply discounted items after 2 days of sale.
It NEVER EVER HAPPENED BEFORE.
And you are advertising stuff for 300 bucks a brick on your first page!
A processor for 300 bucks?
Are you crazy?
Man, you have to list the cheapest stuff to even have 1 person look.
It is a deflationary market dude.
Spencer, you get what you pay for.
But the site is FOR desktop builders, not laptop and desktop buyers. lol
BTW, that $300!!! processor is apperently the hottest selling CPU on Amazon right now.
Yes, people WILL pay for quality in their PC builds - it's why we build desktop PC's ourselves.
Besides, just one spot down there's a processor for less than $60.
I would personally go with the AMD-FX 6300 3.5GHz Six Core CPU at $89. Yes, $89!!!
Can also buy at www.neweggalternative.com as well now.
Are you feedin your application via a amazon API? On the backend or on the frontend? Interesting idea, btw, I didn't know that you can have control over the shopping cart remotly. Your app looks really good, my bad I don't buy at amazon.
Thanks sir, I came up with the idea last night around 11pm (11/28/2014) and by 3 I was done. And the reason it was so fast is A) I'm obsessive and B) Amazon provides almost everything on the site within their associates program, I just have to sort/categorize their horrible disorganized mess of computer parts. It's really confusing because some things are in electronics while others are in computers. I often order from Newegg but honestly if Amazon had a site that was computer-builds-only I think I'd prefer them with the amazon prime free 2 day shipping as well as overnight on weekends. Not sure if they still do Sundays tho. Anyways, thanks for the comment. I know I'd use it, but not sure if people think it's some kind of scam - but it's not - I never see their information and in fact 95% of the site is hosted on their end and displayed in an iframe. LOL
http://amazonpcbuilder.com
My Japanese in-laws certainly aren't collecting any Au, and my father-in-law is a retired banker. Oh wait...
Does anyone believe that ETF actually has those ounces?
I do believe they have physical.
GLD publishes a bar list. They report inventory. They sho they have lost 625 tons since 2012. It makes sense even if it is Jim Willies 'gold on the move.'
The important thing is not some conspiracy but the fact that they report it is leaving their vaults. That is enough of a message for me. I can take a hint.
...buy gold bullion...
I sure don't.
This is silly. First this ETF has one ton of gold??? So what?
Second is that no one is hoarding physical gold, they are buying a paper asset. Show me gold bullion sales in Japan if you want to convince me the Japanese are saving in gold.
Finally what's with the ...'and silver'? Silver has nothing to do with the article ...other than the fact Sprott sells silver too. Silver stackers will never stop their tears when this thing is over.
Alibaba Massive Fraud
Unrelated, but I believe highly important none the less. We have some smart people on ZH and curious if anyone else has heard or read about this. I am hoping someone that has the time and resources can look in to this and do some homework.
I was listening to The John Batchelor Show one night about a week or so again. He is on the radio and can be found online. Incredibly well versed on many international topics and world history. I highly recommend you tune in to him when you have a chance.
In any event, he had three guests (from China) on and the discussion was surrounding a massive fraud at Alibaba. The story goes something like this. Alibaba is a marketplace and they collect a fee on each purchase from merchandisers that operate via their website. Alibaba understands net profits and margins are of little concern to Wall Street, but growth in revenues and now we are talking. Many multiples for "growth" in a global economy that is barely creeping along. So, Alibaba hires a network of thousands to simply buy and return products all day. If Alibaba held inventory this fraud would be somewhat more difficult to pull off, but with thousands of businesses connected to Alibaba it is very easy to hide the costs of labor and returns in underlying (most likely very closely held) companies. Afterall, billions of $'s in stock price appreciation will pay a lot of people to sit on a computer all day and buy and return stuff on their website.
This is massive securities fraud and according to the guests, the scheme is "well known" in China. Besides the financial statement fraud, one would have to wonder what type of due diligence was done by the investment bankers that brought Alibaba to market?
I don't know about you, but I think this could be a watershed Enron-like, Madoff-like story.
Is it 'quid pro quo' for looking the other way on facebook/twitter robo acounts?
So the Chinese guests were saying that AB collected a fee from the merchants when their proxies bought something but that AB did not have to return the fee when the proxies returned the merchandise?... That the merchants had to suck up the loss of the fee paid to AB when the sale was reversed?... Just asking?...
gee, you're awake.
GREETINGS, PROFESSOR FALKEN. WOULD YOU LIKE TO PLAY A GAME?
How about a nice game of chess?
Fill in the gap. Ali Baba and the. _____ thieves.
Goldman Sachs
Wall Street?
Zimbabenomics!
-Kobe Beef
Likin wut I c so far. Keep postin Kobe. I'll keep rubbin they cattle fer massage and slaughter. We eats they beef and savor they tastes.
That is paper, not gold.
Big deal. Alan Greenspan probably has more gold than this fund.
Silly woman, silver is for food, gold is for your life.
https://www.youtube.com/watch?v=IGYaFMFU63U
http://mobile.bloomberg.com/news/2014-11-27/japan-2-year-note-sale-may-p...
Shit.
Just a theory but forcing allies with strong currencies to trash their currency indirectly helps support the dollar.
In a race to the bottom, no currency wants to be strong
It takes free trade to debase every currency. To the victor go the spoils. The unincinerated, unbombed to glowing dust spoils. Can't have another total destruction war of attrition, can we?
Wow, that ETF has 8 tonne of gold, big deal.
240K ounces = about $300 million dollars worth. You can rise 8 fold, but if it's from a small base, it's still a small amount. I agree that this says that the Japanese are more concerned about paper money (fiat), but it is just a drop in the bucket.
If China can do the purchases they do, and still have paper gold being able to supress the price at curent levels and lower, then none of the rest really matters.
Bottom line: If you do not want to hold paper assets, buy gold. If you're comfortable with paper assets and the monetization of debt, go there (risk assets).
1,000,000 grams = 1,000 kg = 1 T (metric ton)
Just getting things into the right perspective, metric wise...
1,000,000 grams = 1,000,000,000,000,000,000 picograms
Getting things into perspective QE wise (calculators will have to have more digits).
Interesting article. I have never seen this site before:
http://www.globalresearch.ca/a-major-international-monetary-crisis-is-lo...
yes good article
wonder what the economic terrorism wing of the Pentegon is gonna do
And a hearty "fuck you"to bank of America! Thanks, makes my day.
First pic caption contest:
- President Abe! Sir! With all this QE madness, how many years do you think Japan has as a going concern?
- Three.
...Which seems about right..although listening to doomsayers like myself, you'd think Japan would be much worse off by now....
For those who only think of Gold priced in US dollars, it's interesting to look at Gold priced in Yen:
Gold didn't peak until April 2013, and touched a high of around 157,000 Yen.
Today, Gold is sitting just under 140,000 Yen; not too far off its high.
Consider that a lot of the recent drop in Gold (priced in US dollar terms) has been due to US dollar strength...