Bank of Japan Sprays World With Surprising ¥10 Trillion Gift In Valentine's Day Liquidity

Tyler Durden's picture

In a move that will surely shock, shock, the monetary purists out there, the Bank of Japan has just gone and done what we predicted back in May 2011, with the first of our "Hyprintspeed" series articles: "A Look At The BOJ's Current, And Future, Quantitative Easing" (the second one which discussed the imminent advent of the ¥1 quadrillion in total debt threshold was also fulfilled three weeks ago). So just what did the BOJ do? Why nothing short of join the ECB, the BOE, and the Fed (and don't get us started on those crack FX traders at the SNB) in electronically printing even more 1 and 0-based monetary equivalents (full statement here). From WSJ: "The Bank of Japan surprised markets Tuesday by implementing new easing policies and moving closer to an explicit price target, the latest sign of growing worries around the world about the ripple effects of the European debt crisis on the global economy. With interest rates already close to zero, the BOJ has relied in recent months on asset purchases to stimulate the economy. In Tuesday's meeting, the central bank expanded that plan by ¥10 trillion, or about $130 billion. The facility, which includes low-cost loans, is now worth about ¥65 trillion, or $844 billion." The rub however lies in the total Japanese GDP, which at last check was $6 trillion (give or take), and declining. Which means this announcement was the functional equivalent to a surprise $325 billion QE announced by the Fed. What is ironic is the market reaction: the BOJ expands its LSAP by 18% and the USDJPY moves by 30 pips. As for gold, not a peep: as if the market has now priced in that the world's central banks will dilute themselves to death. Unfortunately, it is only at death, and the failure of all status quo fiat paper, that the real value of the yellow metal, whose metallic nature continues to be suppressed via paper pathways, will truly shine.

The WSJ explains the BOJ's stunning decision further:

Only one out of the 11 analysts polled by Dow Jones Newswires had predicted the BOJ to ease this week.


Most BOJ watchers had said that while there were concerns over the impact of the strong yen and the European debt crisis, neither financial nor economic conditions had worsened to levels that warranted immediate further action.


The BOJ policy board also revised the wording of its "understanding of price stability," saying now it has set a "price stability goal" of 2% or lower in the core consumer price index in the medium- to long-term and a goal of 1% growth for the time being. For calendar year 2011, Japan's core consumer price index—excluding food prices—was negative 0.3%.


The bank had come under criticism that its definition of price stability, the goal it seeks to achieve in its fight against deflation, was too convoluted and vague. Such attacks had increased in recent weeks after the U.S. Federal Reserve in late January adopted a more explicit price target.


Faced with a prolonged deflation, politicians have stepped up their calls on the BOJ to take fresh action, with some threatening to revise legislation to strip away the central bank's independence from the government.

First of all, don't get us started on inflation targeting. Or rather, get Dylan Grice started: he will tell you all about it, and then some.

And while we now really just can't wait to bring to our readers what the global central bank balance sheet will look like after February, when it takes into account the recent GBP50 billlion BOE expansion, the €500-€1000 billion European LTRO part Deux, and now the ¥10 trillion additional BOJ easing, here is what we said on the topic back in May of 2011.

"In a sign some in the BOJ were more cautious about the economic outlook than Shirakawa, Deputy Governor Kiyohiko Nishimura proposed on Thursday expanding the central bank's asset buying scheme by 5 trillion yen ($62 billion).  While the proposal was outvoted by the board, some market players said it may be a sign the BOJ may loosen policy as early as next month. "And loosen it will, because unfortunately as the past 30 years have shown, the country at this point has no other choice but to take the same toxic medicine which merely removes the symptoms briefly, while making the underlying problems far worse.  Also, with the Fed threatening to end QE2 in precisely two months, someone out there has to be dumping hundreds of billions in infinitely dilutable 1 and 0s into primary dealer prop desks. Furthermore, as shown above, the BOJ needs not to buy securities outright: tinkering with the shadow economy in the form of the repo market will provide just as desirable an outcome… If, of course, said outcome is to see gold and silver continue on their relentless rise to new all time record highs. And/or higher. Because the only thing limiting the price of gold is price stupidity and the amount of paper money in existence. Both are infinite.

It's good to see that our May 2011 quote on what the only realy gating factor on the price of gold is has now been broadly absorbed in the asset management vernacular. And yes, once the market does realize what is happening, following the usual 6-8 week uptake period, expect another step function higher in precious metals, CME margin hikes notwithstanding (and the recent CME faux margin cut bull trap aside).

Finally, unlike our own Fed, at least the BOJ is not shy telling the world it is openly buying up REITs and ETFs. For some odd reason our boys over at Liberty 33 are still playing so coy they can only punch their equity trade tickets via Citadel.

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jomama's picture

meh, what's a few trillion here or there these days?

Matt's picture

What Jerks. I mean, if they were just going to print that amount of money anyway, they could have saved us all the drama and simply purchased ALL of Greece's debt.

PY-129-20's picture

Now I have to decide which story is more worrisome. The story about that Russian Sub that was on fire with nukes loaded and minutes away from exploding and scrubing off a piece of Russia or this story. [LINK]


Michael's picture

Thee whole worldwide monetary ponzi scheme is going to blow up in the most spectacular fashion, making that Russian Sub story look insignificant.

resurger's picture

the big guys will eviscerate the markets after most of the dividends are paid out to the big investors. Then the "Big Short" will kick in...

btw: Kicking the Can is bullshit, it's no longer a fucking CAN! it's a CRATE, BARREL, PAPER BALL anything but a can!

Michael's picture

I think the world just needs to go into a maintenance phase.

The planet doesn't need anymore growth.

Michael's picture

The most influential device ever devised by man is and always will be the BIC Lighter, not the Apple I-Pod and facsimile. Nothing to get excited about there.

Global Hunter's picture

When the SHTF a Bic lighter will be very valuable.  

Silver Bug's picture

The fiat just never stops until it commits suicide. QE to infinity is here. We will be forced back to the gold standard.

Banksters's picture

Shouldn't we just say that central banksters are the masters of the universe?

Mr Lennon Hendrix's picture

They ride unicorns and spit fireballs!  Bow to the gods of finance, they are the all knowing and all dancing crap of the universe!

Michael's picture

I congratulate the Jews. They Win.

Michael's picture

If they would just change the word "Chemtrails" to "Chemical Trails", I'd bet they'd win their argument over night.

Michael's picture

Why doesn't anybody make an epic motion picture of the Dot-Com bubble bust?

Uber Vandal's picture

Why watch a movie when we can sit back and watch AAPL, NFLX, RIMM, GRPN, GOOG, PCLN and so many others discover gravity once again in real time as we sit back in disbelief as they head into orbit.

And, we can also watch the mother of all IPO's go STS-51-L with FaceBook (FB).

Only commodities and barbaric relics are in a bubble you know.



ebworthen's picture

Banksters - "Masters of the Universe"?  That would be He-Man or Skeletor, depending upon which one you ask.

(although 85 Broad Street could be Castle Grayskull)

Taint Boil's picture



Bank of Japan Sprays World With Surprising ¥10 Trillion Gift In Valentine's Day Liquidity

Valentine’s Day, Spray, Liquid, Japan ……. There is a joke in there somewhere.

TruthInSunshine's picture

A reader's comments in response to a New York Times article on the situation in Greece (and soon to be the rest of PIIGS+France+U.K.) is purely epic, and I just wanted to share - but let me preface this by saying I'm very much Austrian School, and this reader's comments at least strongly suggest he may be not so inclined; so how incredible is it that he and I have arrived at exactly the same sentiments (with the exception of his 2nd sentence - see my comments after his indented quote in regards to this) on the whos [central fractional reserve bankster parasites] and the whats [enslaving nations] being done, and the instrumentality [debt] being used?:

Bill Appledorf

Accumulation by appropriation. Capitalism in its most primitive form: theft.

Like the Europeans appropriated the assets of the American Indians. Like colonial powers do to indigenous people everywhere: steal the land, steal the resources, price out or kick out the people who are living there.


Debt is war by other means; keep rolling it over until a country can no longer pay it, then the country is yours. Indoctrinate the rubes into blaming the victim, and you'll be able to do it here. All those houses stolen by the banks; AND the banks got $700 billion in taxpayers' cash plus 14 trillion or so in zero-interest loans.


Looting economies without having to drop a single bomb. Enslave a global workforce to boot. Sweet.


So, I agree with Bill Appledorf with the exception of his 2nd sentence.

Capitalism in its most primitive form, however, would not allow global fractional reserve banking syndicates to link up with wannabe monopolilistic or ogilopolistic businesses - only being able to do so through the Deep Capture of alleged 'elected' politicians/legislators and the so-called 'regulators' that they appoint, aka Crony Capitalism.

But capitalism is dwindling. It survives only in the beating hearts of those businesses still functioning and not on the teet of taxpayer dollars provided by Deeply Captured politicians and regulators, with the former folding by the day (especially in the form of what used to be the main driver of economic growth: small businesses).

He is absolutely correct that debt is being used to enslave nations and appropriate wealth of of those not in the Crony Class.

Rogue Trooper's picture

Appledork sounds a tad like those from TAE.  A degree of facts that the reader can associate with to create credibility, but alignment, IMHO with an underlying 'marxism'.

"If only we planned or regulated better we could create a fairer and more just world" sounding like the "Alliance" from Serenity now LOL!

Anyway, f*ck all those "Chardonnay Socialist" and their f*ckin' banker funding bretheren....

Cool post FED.


StormShadow's picture

BOJ sprays world with money, eh?

Is that "fiat bukkake"?

ACP's picture

A veritable bukkake of stock market hopes and dreams!

Ah, who will be next to spread their monetary joy juice throughout the world!?

Jeremy Roenick's picture

"Bank of Japan SPRAYS World with Surprising 10 Trillion Yen Gift in Valentine's Day Liquidity"


Japanese Golden Shower

trebuchet's picture

Holy F*******K 


that shifts money flows big time, carry trade full on

Mr Lennon Hendrix's picture

London better have some plan to stop gold from spiking.  I bet they do.  I bet they flood the oceans with paper gold.  Paper gold for all, bitchez!  Paper gold for all!!!

Matt's picture

Huge surge in paper-backed gold ETFs, for sure. Followed by margin hike at what, $1900? Double the size of the the most recent margin decrease, perhaps?

Mr Lennon Hendrix's picture

The only thing the PTB have going is that the status quo is still to live and die trying to get that paypa.

Rogue Trooper's picture

Please, PLEASE, let this be so....

I could then contemplate replacing what I lost in the boating accident and start again re-building what Granma left to me! On the other hand, that 60" LED, 3D, Social Media enabled TV, with no down and 5 years to pay, interest free, is pretty darn tempting (?)

ForTheWorld's picture

I'm sorry for your loss. I too know of the pain of lost items via a boating accident.

Pete15's picture

And the next chapter of Currency Wars continues 

Mr Lennon Hendrix's picture

It's the last chapter, hombre.  The story ends in hyperinflation.  Someone light a match, I dare ya.

unrulian's picture

yea your matches...this book is infinite...futures up today, surprise, surprise... what a fucking joke

Mr Lennon Hendrix's picture

I was wondering about that spike.  How long will it last?  Two trading sessions?  Way to go Shirakawa, you fucking idiot.

trebuchet's picture

I think that post lunch nikkei spike timed with the greek midnight vote, this one is NOT priced in.



Mr Lennon Hendrix's picture

At this point the only thing not priced in is the AAPL.

YesWeKahn's picture

central bank buying equilties? wow.

chump666's picture

BoJ are experts at it. 

jcaz's picture

Yep- screwing with currencies worked out SO well for Japan circa 1940........

resurger's picture

Iceland Bitchez

 long story short, It got fucked because of Government intervention, they said they they are ready to bail out the economy! They were heavly involved in carry trade and which created foreign currency mismatch (banks issued short-term liabilities in order to invest in long-term assets)

in 2007, after ten years of growth, the big three Icelandic banks, Kaupthing, Glitnir, and Landsbanki, owned assets in excess of 1100 percent of Iceland's GDP

Then Kratos came from Greece... reminds me of some graphix tyler posted a day ago..

Floordawg's picture

Ara! Onara suru tsu-mori datta keh-do, un-chi ga de-chatta.

vh070's picture

Shift the comma by one syllable to yield blood.

Ara!  Onara suru tsumori datta kedo un, chi ga dechatta.

(I intended to fart but Xshityeah, blood emerged.)



jonjon831983's picture

A spray in face like certain Japanese movies.


Juvenile.  Sorry. I couldn't resist.

jonjon831983's picture

I guess this type of spraying activity encourages people to try smuggling gold into Japan in any possible way.