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Bond Wars: Chinese Advisor Calls For Japanese Bond Dump

Tyler Durden's picture




 

Earlier today we casually wondered whether the US stands to lose more by supporting China or Japan in their escalating diplomatic spat, considering the threat of a US Treasury sell off is certainly not negligible, a dilemma complicated by the fact that as today's TIC data indicated both nations own almost the same amount of US paper, just over $1.1 trillion. In a stunning turn of events, it appears that China has taken our thought experiment a step further and as the Telegraph's Ambrose Evans-Pritchard reports, based on a recommendation by Jin Baisong from the Chinese Academy of International Trade (a branch of the commerce ministry) China is actively considering "using its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to "impose sanctions on Japan in the most effective manner" and bring Tokyo’s festering fiscal crisis to a head." I.e., dump Japan's bonds en masse.

Should this stunning recommendation be enacted, not only would it be the first time in world history that insurmountable credit is used as a weapon of retaliation, it would mark a clear phase transition in the evolution of modern warfare: from outright military incursions, to FX wars, to trade wars, culminating with "bond wars" which could in the span of minutes cripple the entire Japanese fiscal house of cards still standing solely due to the myth that unserviceable debt can be pushed off into perpetuity (as previously discussed here).

Not needing further explanation is the reality that should China commence a wholesale Japanese bond dump, it may well lead to that long anticipated Japanese bond market collapse, as creditor after creditor proceeds to sell into a market in which the BOJ is the buyer of only resort in the best case, and into a bidless market in the worst.

The immediate outcome would be soaring inflation as the BOJ is forced to monetize debt for dear life, buying up first hundreds of billions, then trillions in the secondary market to avoid a complete rout, matched by trillions of reserves created out of thin air which may or may not be halted by the Japanese deflationary gate, and which most certainly could waterfall into the economy especially if Japanese citizens take this as an all clear signal that the Japanese economy is about to be crippled in all out economic warfare with the most dangerous such opponent, and one which just defected from the "global insolvent creditor" game of Mutual Assured Destruction.

Further complicating things is that Japan has no clear means of retaliation: it owns no Chinese bonds of its own it can dump as a containment measure. Instead, Japan is at best left with the threat of damages incurred on the Chinese economy should Japan be lost as a trading parting. It appears, however, that to China such a gambit is no longer a major concern:

Mr Jin said China can afford to sacrifice its “low-value-added” exports to Japan at a small cost. By contrast, Japan relies on Chinese demand to keep its economy afloat and stave off “irreversible” decline.

 

“It’s clear that China can deal a heavy blow to the Japanese economy without hurting itself too much,” he said. It is unclear whether he was speaking with the full backing of the Politburo or whether sales of Japanese debt would do much damage. The Bank of Japan could counter the move with bond purchases. Any weakening of the yen would be welcome.

Yes, but any offsetting Japanese hyperinflation would not, which is precisely what would happen if after 30+ years of dormancy the Japanese bond vigilantes were woken up by none other than a cuddly Panda bear with very murderous intentions.

Ironically, this terminal bond war escalation would also mean that Japan's last ditch alternative is to threaten the US with dumping America's bonds in turn if the US i) does not step up on behalf of Japan and ii) if Japan is forced to promptly convert debt from one denomination into another. The fallout effect would be most dramatic.

It is unclear if China will proceed with this "scorched bond" step: should this happen there is likely no turning back as it would force a market test of the entire developed world. And as our readers know all too well, the entire developed world is insolvent, and the only reason why it has perpetuated the illustion that all is well, is because being a closed system, nobody has the incentive to defect. Until now that is, when suddenly over a piece of rock in the East China Sea, China may find itself pulling the pin on the global debt grenade.

And even if this is not the final denouement, the market appears to already be pricing in several not much more favorable outcomes:

Markets are already starting to price in an arms race in Asia. Shares of China’s North Navigation Control Technology, which makes missile systems, have jumped 30pc in recent days.

 

China is becoming self-sufficient in defence. It was the world’s biggest net importer of weapons six years ago. It fell to fourth place last year.

 

Japan is at the other extreme. An official report this year – “A Strategy for Survival” – said Japan’s spending on its “Self-Defence Force” had shrunk by 4pc in 10 years. It called for “urgent” action to rebuild the country’s military.

One thing here is certain: Japan picked on the wrong country when two weeks ago it "purchased" the disputed Senkaku Islands. If it thought that China would just forgive and forget with a wink, it was dead wrong.

It now has several two options: undo all that has happened in the past fortnight, in the process suffering tremendous diplomatic humiliation, leaving Senkaku in the "no man's land" where they belong, or push on, and suffer the consequences. And the consequences for the country represented by the question market in the chart below, would be tragically severe, as would they for the entire "developed", insolvent and daisy-chained world.

 

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Tue, 09/18/2012 - 17:36 | 2808578 Sutton
Sutton's picture

Doesn't matter.  Ben will buy them.  Yawn.

Tue, 09/18/2012 - 17:38 | 2808585 ACP
ACP's picture

Chuckle, after yawn.

Tue, 09/18/2012 - 17:50 | 2808629 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Cry, after chuckle, after yawn....

Tue, 09/18/2012 - 17:53 | 2808636 redpill
redpill's picture

Take a shot of cheapest hot sake I can find, after cry, after chuckle, after yawn....

Tue, 09/18/2012 - 17:53 | 2808640 Michael
Tue, 09/18/2012 - 18:02 | 2808679 e-man
e-man's picture

I like that last chart...all lined up like little dominoes.

Tue, 09/18/2012 - 18:07 | 2808694 Michael
Michael's picture

Will The Real Mitt Romney Please Stand Up (feat. Eminem)

http://www.youtube.com/watch?feature=player_embedded&v=bxch-yi14BE#!

Tue, 09/18/2012 - 19:35 | 2808932 nope-1004
nope-1004's picture

You used to post relative, on topic shit Michael.  Now you blather like GZG.  Are you going nuts or something?

 

Tue, 09/18/2012 - 19:47 | 2808969 Michael
Michael's picture

The choir pretty much knows all this shit already. Some people can walk and chew gum at the same time.

Tue, 09/18/2012 - 20:24 | 2809091 zaphod
zaphod's picture

This just shows how stupid the Chinese government is and how everyone saying they have some sort of master plan over generations is just nonsense.

 

China has to keep incremental buying of Japanese and US debt to prevent their currency from increasing. This is not mean keeping the same number of bonds, but constantly increasing their holding. Stopping this (or dumping) will cause the yuan to rise until trade is balanced. This would in turn destroy China.

 

It is also why you never run the merchantile trade system against fiat paper money. China will learn very soon....

Tue, 09/18/2012 - 20:27 | 2809101 malikai
malikai's picture

Are you high? Did you even read the article?

Also, these power handovers are so fun. Remember when Bush got in office and there was that little incident with the spy plane midair?

Tue, 09/18/2012 - 21:44 | 2809409 Solarman
Solarman's picture

Did you understand him?  Japan simply says those bonds are null and void, China must buy bonds elsewhere or their currency rises.  Japanese leaders call their very obediant and smart and determined people together and say we need to go on a war footing to survive.  Japan goes nuclear, and rebuilds their military capability, and sacrafices to clear their debt..

 

 

Tue, 09/18/2012 - 23:11 | 2809663 sullymandias
sullymandias's picture

Right, Japan is going to openly default on their bonds?

Tue, 09/18/2012 - 22:35 | 2809587 BigT4451
BigT4451's picture

Zaphod, I think you have a point.

I have also wondered if global trade imbalances are caused by China manipulating their currency by purchasing foreign debt (currency).  That is why their foreign exchange reserves have become so massive in the first place.

By selling those same currencies all at once it would put tremendous pressure on the Yuan and effectively wipe out the labor cost advantages that have fueled their growth over the past decade.  I would think if they dumped the FX all at one time, the move would be even more dramatic, and kill their export market as their goods become tremendously more expensive in a short period of time.

I have also wondered if part of our QE was really a defacto trade war with China to improve American competitveness.  So far China has not let their currency slide enough to make a difference, but if they would dump all of a currency like that, they would effectively lose the currency war.

Now, I have never fully believed what I just wrote, but I have had those thoughts.  Sounds very similar to your hypothesis.

Tue, 09/18/2012 - 23:13 | 2809669 sullymandias
sullymandias's picture

There are other things in life for a nation than exporting goods to other nations. I'm afraid that kind of "global marketplace" ideology is fast becoming obsolete.

Tue, 09/18/2012 - 20:50 | 2809149 BlueCollaredOne
BlueCollaredOne's picture

I've learned from a young age to consider my source, conaidering i watched 9/11 from my high school classroom.

That being said, pull your shit together man. You can be a individual that stears other minds to seek the truth, but lately you come across glenn beckesque

Wed, 09/19/2012 - 06:29 | 2810183 Cast Iron Skillet
Cast Iron Skillet's picture

if you watched 9/11 from your high school classroom, you're still at a young age (unless you were the teacher).

Wed, 09/19/2012 - 06:41 | 2810189 awakening
awakening's picture

I'd hope that poster is at an young age, enlightened individuals in this age group are, in my experience, few and far between.

Tue, 09/18/2012 - 20:44 | 2809150 BlueCollaredOne
BlueCollaredOne's picture

Double post

*super combo*

Tue, 09/18/2012 - 20:46 | 2809152 BlueCollaredOne
BlueCollaredOne's picture

Triple post

**ULTRA COMBO**

Tue, 09/18/2012 - 18:30 | 2808747 A Nanny Moose
A Nanny Moose's picture

Worry not...Japan shall fall into it's own footprint

Tue, 09/18/2012 - 18:49 | 2808802 bank guy in Brussels
bank guy in Brussels's picture

Obviously the Japanese elites started this stupid arrogance over islands near to China, because the US told them to do it ... they wouldn't have dared without US backing

The Japanese elites accept constant humiliation at the hands of Americans (rape of Japanese by US military personnel, bases in Japan which Japanese hate)

Japan's elites rolled over in the 1985 Plaza Accord extortion by America, which directly led to currency imbalance, internal huge bubble, Japan's crash four years later, and the 'lost decades' since then

Now Japan's elites, betraying Japan's people, are rolling over in 2012 in another American game:

- inducing China to become aggressive, leading much of the rest of East Asia to pull closer to America

- sabotaging the Japan - South Korea - China alliance which had been getting nicely started, which would have made the world's largest economic power

- helping the US destabilise the whole region, something America typically seeks

- and maybe inflaming one flank of World War III

Tue, 09/18/2012 - 18:56 | 2808814 Michael
Michael's picture

And many of those "thousand points of light" Japanese Illuminati will be eliminated.

Tue, 09/18/2012 - 19:29 | 2808903 saturn
saturn's picture

"It now has several two options: ..."

LOL

Tue, 09/18/2012 - 19:30 | 2808910 Jethro
Jethro's picture

From a slightly different perspective, China can absorb this sort of loss (or perhaps just thinks that it can). Maybe their military is more to control their own population rather than to be an expeditionary force? The older people will still remember the Great Leap Forward, whereas the Japanese population won't generally have that level of personal adversity to draw upon. China might be willing to "self sacrifice" in order to strike a mighty blow.

Tue, 09/18/2012 - 19:32 | 2808911 Jethro
Jethro's picture

I guess it was worth saying twice.

Tue, 09/18/2012 - 20:23 | 2809089 Unbezahlbar
Unbezahlbar's picture

Since Japan is in such a hole (2,000% debt to revenue and Fuki saturated) they may feel they have nothing to lose. Luckily, Panetta was just there prob selling them $200 Billion in equipment .....$200 Billion borrowed from JPM (or GS or C) to buy the WMDs from the M-I establishment (which is good for USA to stimulate the economy and create jobs).

 

Bankers are never far behind a war.

Tue, 09/18/2012 - 18:08 | 2808697 THX 1178
THX 1178's picture

c-c-c-combobreaker

Tue, 09/18/2012 - 19:00 | 2808824 Parabolic
Parabolic's picture

1.  long kyle bass bitchez

2. physical = no counterparty risk!

Tue, 09/18/2012 - 18:09 | 2808698 Max Hunter
Max Hunter's picture

This isn't even remotely surprising. Beck is funded by Jews. Jews need the Holocaust religion repeated.. and repeate.. and then repeated some more.. just in case you missed it the first 50 thousand fucking times in your life..

Tue, 09/18/2012 - 18:17 | 2808716 john39
john39's picture

and meanwhile every other mass slaughter inflicted on humanity is ignored...  for example, the tens of millions of Russians who died at the hands of zionist bolsheviks...      Mormons are totally hypnotized by Israel on pseudo religious grounds... Romney is obviously no different. 

Tue, 09/18/2012 - 19:33 | 2808922 Irene
Irene's picture

Oh wow!  Stalin was a Jew?  Who knew.

Tue, 09/18/2012 - 19:47 | 2808966 El Tuco
El Tuco's picture

No but his whole politiburo was....

Lenin also was a Jew who killed and sent millions to labor camps for speaking their own languages instead of Russian while he spoke yiddish...

So fuck face learn some history.

Tue, 09/18/2012 - 20:26 | 2809100 spdrdr
spdrdr's picture

Source?  Lenin was not a Jew, and did not speak Yiddish.

Your grasp of history seems somewhat deficient itself.

Tue, 09/18/2012 - 20:34 | 2809129 lakecity55
lakecity55's picture

Not so fast, Comrade:

Vladimir Ilyich Ulyanov was part Hebe:

 

http://www.time.com/time/world/article/0,8599,2077413,00.html


Tue, 09/18/2012 - 21:19 | 2809229 spdrdr
spdrdr's picture

So, his mother (who was raised a Lutheran) had a father who was born Jewish?

Lenin, who was baptised in the Russian Orthodox church, is therefore a Jew who speaks Yiddish (according to the commenter above, giving history lessons)?

By Allah (swt), you Jew-haters draw a long bow sometimes.......

Tue, 09/18/2012 - 21:50 | 2809417 El Tuco
El Tuco's picture

Your so fucking stupid....I can't help you to understand.

Wed, 09/19/2012 - 03:43 | 2810039 Rogue Trooper
Rogue Trooper's picture

For what it's worth I doubt Lavrentiy Beria would have wasted a bullet on all you useful fuckin' idiots.

I used razor blade was much cheaper......

Efficiency BItChez - FORWARD SOVIET :/

Wed, 09/19/2012 - 11:45 | 2811348 Kobe Beef
Kobe Beef's picture

Focusing only on Lenin's disputed ancestry conveniently leaves out the contributions of the following:

Leon Trotsky

Grigory Zinoviev

Solomon Lozovsky

Maxim Litvinov

Yuri Andropov

Jacob Sverdlov

Jacob Yurovsky

Lazar Kagonovich

Mikhail Kagonovich

Genrikh Yagoda

Nikolai Yezhov

Max Lieven

Matvei Berman

Boris Berman

Yona Yakir

Lev Inzhir

need more? http://www.revisionisthistory.org/communist.html

The list includes nearly all Kommisars and Generals of the Red Army. And we have not even scratched the surface of the financiers.

"There is no need to exaggerate the part played in the creation of Bolshevism and in the actual bringing about of the Russian Revolution by these international and for the most part atheistical Jews." --Winston Churchill

Tue, 09/18/2012 - 20:30 | 2809110 lakecity55
lakecity55's picture

They had jew names but changed them to Russian. Who would believe a Comrade Finkelsteinski?

So, it's Comrade Zinoviev, get it?

If the Protocols of Zion were forged, how come they are coming true?

I do like Beck's analyses, but he is deep into the zionista voodoo.

These aren't the Jews you are looking for.

Tue, 09/18/2012 - 20:41 | 2809151 lakecity55
lakecity55's picture

Damn! Everywhee you look in history, some zionista pops up.

I hope my jew buddies are not laughing behind my back in some secret room under the temple.

Maybe they are just regular jew guys. I hope so.

Tue, 09/18/2012 - 18:21 | 2808726 nmewn
nmewn's picture

A quarter million Gypsies could not be reached for comment.

Tue, 09/18/2012 - 18:30 | 2808744 Winston Churchill
Winston Churchill's picture

As well as homosexuals,communists,trade unionisrts,morons and the

physically handicaped.

The Nazi's were equal oppotunity exterminators.

11 million died in the concentation camps.Who remembers the other 5.

Tue, 09/18/2012 - 18:32 | 2808757 A Nanny Moose
A Nanny Moose's picture

"Then they came for me, but there was nobody left to speak for me."

Tue, 09/18/2012 - 21:19 | 2809314 Ignorance is bliss
Ignorance is bliss's picture

spooky...like a ghost...

Wed, 09/19/2012 - 03:53 | 2810057 Rogue Trooper
Rogue Trooper's picture

True, Stalin, Mao, Hitler, Pol Pot, Kissenger, et al.  At least they killed every fucker'.

They did not discriminate.  Really fair, a pogrom now and then, what's not to like?

Wed, 09/19/2012 - 11:17 | 2811218 Kobe Beef
Kobe Beef's picture

11 million died in concentration camps, eh? Source please.

Tue, 09/18/2012 - 20:44 | 2809163 sushi
sushi's picture

1.5 million Armenians "disappeared" by Turkey.

Tue, 09/18/2012 - 20:26 | 2809099 stocktivity
stocktivity's picture

Throw up after yawn

Tue, 09/18/2012 - 17:55 | 2808650 Ineverslice
Ineverslice's picture

Ambrose P., Bloody Panda, lol.

I like their orange chicken.

Tue, 09/18/2012 - 17:58 | 2808664 redpill
redpill's picture

The Chinese have no chance against this type of psyop media

Tue, 09/18/2012 - 18:33 | 2808759 Son of Loki
Son of Loki's picture

James Rickards...will Mr James Rickards please step onto the podium:

 

https://www.youtube.com/watch?v=Vua3vsS5us8

Tue, 09/18/2012 - 19:08 | 2808849 kengland
kengland's picture

Whollt ihr den totalen krieg?

Tue, 09/18/2012 - 20:24 | 2809095 Unbezahlbar
Unbezahlbar's picture

Das ist eine gute Frage.

Tue, 09/18/2012 - 17:46 | 2808617 Dan The Man
Dan The Man's picture

the pop in gold says it does.

Tue, 09/18/2012 - 19:04 | 2808841 lolmao500
lolmao500's picture

Well I hope you got ammo and guns and food because if this happens, America and the world economic illusions goes boom with it.

Tue, 09/18/2012 - 17:52 | 2808632 Quinvarius
Quinvarius's picture

Pretty much what I was thinking.

Tue, 09/18/2012 - 18:10 | 2808700 Antifaschistische
Antifaschistische's picture

So, if the Chinese get a train load of BoJ fresh Yen then.....whose the joke really on? What will they do? Burn it in defiance? Then the joke is on the Chinese. No doubt Japan will suffer as ZH frequently and excellently demonatrates...but bond dumping is a game of MUTUAL destruction.

Tue, 09/18/2012 - 18:43 | 2808787 css1971
css1971's picture

China wants commodities so dump the yen and buy oil, LNG and coal. Japan's imports increase in price.

Tue, 09/18/2012 - 19:36 | 2808936 Bastiat
Bastiat's picture

. . .and gold and silver too.

Tue, 09/18/2012 - 18:01 | 2808651 vast-dom
vast-dom's picture

dumping Japanese paper means yields for BOTH Japan AND USA will finally head in the right direction -- China's timing would be impeccable right about now as they'd come around and scoop up both Japan and USA on the cheap more at TRUE non-hopium QEi pricing-- the ultimate warfare and justice at this stage; the irony being that it'd get global markets to correct and allow us to return to some kind of sane equilibrium thus doing the whole world a favor.

 

Die Bernankzi Put, Die.

Tue, 09/18/2012 - 18:01 | 2808675 InconvenientCou...
InconvenientCounterParty's picture

If China is prepared to break the $ peg, they can get serious.

Tue, 09/18/2012 - 18:04 | 2808684 ACP
ACP's picture

May be, but if you're talking about trading trade wars, the HFTs by the Wall St criminals are light years ahead what anyone else has.

 

Tue, 09/18/2012 - 20:45 | 2809170 Ness.
Ness.'s picture

Bidless markets will take care of those pesky HFT's... personally, I can't wait to watch them fist-fuck each other to death. 

Tue, 09/18/2012 - 18:08 | 2808696 snowlywhite
snowlywhite's picture

folks, get real... biggest military wins; US = biggest military. Rest... really, there's nothing else.

 

China will wait the 10-20 years or whatever's need bypass US military wise. And they're wrong; they've always been too cautious. In 20 years, looking at their demographics, China itself will be in deep shit.

Tue, 09/18/2012 - 18:19 | 2808723 snowlywhite
snowlywhite's picture

p.s. - obviously, all this with the small condition that the US military doesn't kill their own citizens first. And on that... wouldn't bet the ranch.

Tue, 09/18/2012 - 18:36 | 2808765 A Nanny Moose
A Nanny Moose's picture

IDK. Have many of the "brains" for our hardware been produced in China by high strung Foxconn workers? One child policy has built quite the army of single men looking for....love.

Tue, 09/18/2012 - 19:10 | 2808854 delacroix
delacroix's picture

the pictures I've seen of foxcon, show mostly young women workers. those women would never partner with a man beneath their status (unemployed)    no job and no pussy.

Tue, 09/18/2012 - 23:18 | 2809689 Raymond Reason
Raymond Reason's picture

Or as they say in China, no money, no honey.

Tue, 09/18/2012 - 18:37 | 2808766 Winston Churchill
Winston Churchill's picture

Size does not matter when talking nukes.

The Chinese have some really good convential missiles that cannot yet be defended against.

So you you want to make their day ?

Tue, 09/18/2012 - 19:54 | 2808987 fnord88
fnord88's picture

plus a few high altitude nukes would destroy ALL of the USA. Most chinese still dont have electricity, so what the fuck would they care? Plus with EMP, you can invade the country and not worry about radiation. 

Tue, 09/18/2012 - 19:57 | 2809002 emersonreturn
emersonreturn's picture

snowlywhite, Mao astutely tagged the USA a Paper Tiger for very good reason.  the USA had every chance and more than a few reasons to nuke China but it never did.  regarding china and its population the USA has always paused to have the big think.    that was at a time the USA was  ascending, now it's tumbling into economic insolvency it will be even more reticent to push a confrontation.  TPTB will take a time out.  i don't believe japan should not count on TPTB having their back.  right now the TPTB are minding their own.  confrontation with china is not a good idea; neither prudent nor viable.  the only hope the USA and European PTB have is to infiltrate china and spread dissent and confusion and revolution and allow the dormant war lords and emperors and failed Nationalists  to reemerge and fight to reclaim power.  failing that and possibly in the meantime to buy time TPTB will have to chose sides.  Japan has already taken a nuclear hit...never china in spite of Mao's disdain ...Japan is already down for the count.  TPTB are heartless and the blood is already in the water.

Tue, 09/18/2012 - 20:21 | 2809088 lakecity55
lakecity55's picture

Exactly. The MO is a 'color revolution.' Wonder which one they pick for China?

Tue, 09/18/2012 - 21:08 | 2809272 snowlywhite
snowlywhite's picture

all history shows that powers with poor economy and big army choose one and the same thing. Over and over again. Revolution, conventional war, whatever... the choice was always the same.

 

And frankly Mao was hardly the smartest guy around.

Wed, 09/19/2012 - 00:26 | 2809855 Anusocracy
Anusocracy's picture

At least Mao was better looking than Hillary.

Wed, 09/19/2012 - 00:46 | 2809895 emersonreturn
emersonreturn's picture

snowlywhite, certainly stalin outfoxed Mao in Korea, Mao would've preferred to put his energy straight onto Tibet, but the US and McArthur...that's another muddy story, not so clear.  Mao was very good at Go and taking advantage of a situation, you may judge that to be instinctive, i'm not so sure.  the world at that time had some very intersting players: mao, hitler, stalin, churchill, franco, gandhi...americans, not so much...but now...who do we really have?  good or bad...basically all the world players seem medicore, badly third rate, even as villians.

Wed, 09/19/2012 - 04:10 | 2810076 Rogue Trooper
Rogue Trooper's picture

Bloody good point - no idea why you got 'junked' with the down arrow.  At this point sure the PLA can cause some damage perhaps even get a Carrier.  But who the fuck cares when everything else on the sea, in a harbour, or on an eastern base is fucking scrap.

The Chinese are not that stupid.  They will wait until the odds are more favourable and keep playing the great game....

BTW They are not going to go Nuke unless they where invaded and even then not until they are actually are at risk of loosing.

Tue, 09/18/2012 - 18:10 | 2808701 WhiteNight123129
WhiteNight123129's picture

The Irony is that in order to force the curve steepness the Fed has to first buy the bonds and be serious that it will burn cash if people don´t spend it (the Rich and the Corporations). In order to avoid collapse some money needs to be printed, but since teh Fed can not just deliver some Benjamins it is buying treasuries, but affecting inflation expectation by going all in is what is needed to force the monetary ignorant at GOOG to spend their cash, or someone else will understand it first and dump his cash first (Buffet last year). Hopefully those idiots will see the writing on the wall and spend their fucking cash back into the circulation.

 

Tue, 09/18/2012 - 18:13 | 2808706 WhiteNight123129
WhiteNight123129's picture

Bernanke wants the Curve to get steeper, not flatter. He will get it, flame thrower in full motion go Benny force them to spend!

 

Tue, 09/18/2012 - 18:14 | 2808709 Antifaschistische
Antifaschistische's picture

I wouldnt buy japan or the US. Id buy an RSA gold/platinum/rhodium mine and repatriate every ounce of production...

Tue, 09/18/2012 - 17:59 | 2808668 fonzannoon
fonzannoon's picture

I rarely do the youtube posts on here but this is fuckin awesome. It's Jesse Ventura from last night. Something for everyone on here. I hope Tyler posts it.

http://www.youtube.com/watch?v=Y40We-O7qAc

 

Tue, 09/18/2012 - 18:31 | 2808752 Drachma
Drachma's picture

"When the power of love overcomes the love of power, the world will know peace."

Jimmy Hendrix

 

Love that one.

Tue, 09/18/2012 - 19:10 | 2808851 Loose Caboose
Loose Caboose's picture

It is an awesome interview however,  I kept wondering "why is the MSM giving Ventura a platform on a highly viewed TV show?"  Maybe they thought they could discredit all discenters by making him look the fool?  Didn't work.  The audience was 98% behind him.  Yet, at the end, Morgan declared him "slightly crackers". 

I love Jesse but he needs some coaching to get him to ditch the head-wagging, self-righteous swagger every time he makes a point.  It looks arrogant and can be off-putting or worse, make him look a tad unbalanced.  The man is the real deal, and I don't give a rat's ass about his pony-tail or Hendrix T, but the arrogant 'tude has got to go.  With that gone, he'll make himself a smaller target for those who would paint him as "slightly crackers."

Great show.  He even talked about 9/11 - good God I never thought he would be allowed to go there.

 

Tue, 09/18/2012 - 18:00 | 2808671 fonzannoon
fonzannoon's picture

 

 dupe

Tue, 09/18/2012 - 18:21 | 2808725 kito
kito's picture

fonz, youve been less than verbose lately, we hope all is well with you...

Tue, 09/18/2012 - 18:32 | 2808758 Dr. Engali
Dr. Engali's picture

He is busy formulating an escape plan from Manhattan when the zombie apocalypse happens.

Tue, 09/18/2012 - 18:53 | 2808812 BKbroiler
BKbroiler's picture

working on that myself.  should be quite the party.

Tue, 09/18/2012 - 19:29 | 2808900 fonzannoon
fonzannoon's picture

Good luck buddy we are all gonna need it

Tue, 09/18/2012 - 18:54 | 2808806 fonzannoon
fonzannoon's picture

Hey Kito, I'm here man, thanks. It's hard to find different types of ways to say the same things. Plus we are all on here (for the most part) posting things that everyone else on here seems to follow. I am still on here looking everyday and I still find the discourse better than ever. I am pretty curious too. I think things start entering a more dangerous phase at some point. So I take my dog for a longer walk and I try to do some fun stuff with the family etc.

If you are local we should catch up and grab a brew at some point before defcon 4. I'd say the same to Doc Engali but I am guessing doc is a bit further away.

Tue, 09/18/2012 - 18:59 | 2808830 Dr. Engali
Dr. Engali's picture

I share the same sentiment with everything you just posted. I spend a lot more time in thought too,trying to figure out what I really can and would do if/when shit gets ugly. Sadly my wife isn't part of that thought process because she doesn't like to think that way.

I'd like to join you for a beer ,you're right though.,,,The drive from Indiana to Manahattan is a long one.

Tue, 09/18/2012 - 19:05 | 2808843 fonzannoon
fonzannoon's picture

My wife is past the denial stage. She was born in Minsk and her family has been through currency devaluations before. actually nobody around me doubts me anymore. That's the crazy thing. They still throw their hands up and try to make waiting on bread lines sound like it's gonna be fun because we are all in it together. Whacked out fantasy land people.

I am heading to the Steeler's/Eagles game in Oct. That's as close as I get to Indiana. That is until I show up with my family hoping to become a farmer sometime next year.

Tue, 09/18/2012 - 19:19 | 2808874 Dr. Engali
Dr. Engali's picture

That should be a good game.I'm a through and through Steelers fan. Have been all my life. Much to my father's chagrin ( he's a Browns fan)

Tue, 09/18/2012 - 19:27 | 2808893 fonzannoon
fonzannoon's picture

Heinz field is badass. I went to the casino near the stadium at 2am hammered last year. Me and my buddies threw down some money on the roulette wheel. There was no one around. The guy spun the wheel like half a rotation and we all lost. One of my buddies got pissed and the guy told us to get lost. My friends were all bent out of shape but I felt all warm and fuzzy because it felt like the stock market away from home.

Tue, 09/18/2012 - 20:27 | 2809104 kito
kito's picture

Hmmm fonz, I may have to take you up on that brew....problem is after we hash out the future, that brew may turn to many shots of tequila and/or vodka...you in manhattan or outer boroughs? ..... Doc, lov the steelers, been a fan since they took down the rams in 1980......btw let it be known that docs turkey sandwich value meal order was placed today via telephone...ready for consumption tomorrow afternoon.........

Tue, 09/18/2012 - 20:38 | 2809141 fonzannoon
fonzannoon's picture

I knew Doc was a stand up guy. By the way, I clearly remember Sheepdog saying a few months ago that he would upload a video of him eating his straw hat if they did QE. Have not seen him on here lately...

Kito I live on LI. 45 min train ride to Penn Station. Easy enough. I am away the next two weekends but I will touch base with you about this again. Let's make it happen.

Tue, 09/18/2012 - 20:49 | 2809191 Dr. Engali
Dr. Engali's picture

I was wondering about Sheepdog today. I haven't seen him around for a while.

Tue, 09/18/2012 - 20:05 | 2809039 in-Credible Banker
in-Credible Banker's picture

Bills hammer the Browns this week, in CLE.  I'm there!

 

:)

Tue, 09/18/2012 - 20:02 | 2809022 centerline
centerline's picture

Same here.  I am in Florida though.  Orlando area.  I don't have much to hide - enough posts and I am probably not that hard to map.  I figure whomever is watching has my number for whatever it is worth to them.   I hang my hat on being a hard-working, honest family man.

Anyone ever heads down to Disney area - give me a ring through whatever ZH mechanism works.  Drinks are on me (I am also a pretty damn good cook too.)

Tue, 09/18/2012 - 20:10 | 2809060 fonzannoon
fonzannoon's picture

Good shit man. We are all in the same boat. Only thing that gives me hope....

Tue, 09/18/2012 - 18:46 | 2808775 xtop23
xtop23's picture

its spelled Yuan.......... /yawn.

been talking about something similar to friends when they were discussing the "China is a currency manipulator" gas and all that. they couldnt grasp my point when i would inform them that if China really wanted to bring it, all they would have to do is dump their treasuries and they could screw things up at light speed. mutually assured destruction, but a high face card to play at the final table nonetheless.

Tue, 09/18/2012 - 18:49 | 2808801 EuroInhabitant
EuroInhabitant's picture

The BoJ will buy too. Storm in a teacup.

Tue, 09/18/2012 - 19:05 | 2808844 chump666
chump666's picture

Yes Ben will buy them but interest rates will shoot up.  Nasty.

Tue, 09/18/2012 - 19:19 | 2808873 emersonreturn
emersonreturn's picture

could Japan refuse to pay them?

Tue, 09/18/2012 - 19:45 | 2808953 Darth Rayne
Darth Rayne's picture

Bluff, within bluff, within bluff. Complexity, that's the problem. Far too complex.

Just when i thought that's it. That's how the fiat experiment ends. But no.

Thanks Sutton, I will sleep soundly tonight.

 

So, to sum up. USA grumbles about China starting a currency war with the USA. China appears to start a currency war with Japan. USA has to shut up or buy Japan.

When the experiment ends nobody is going to trust fiat for decades. It is a pity there isn't enough gold. We need 1000 times more of it than we have got. The alternative would be gold at a million US per ounce, which is silly. I might as well doodle on a piece of paper, 'this paper is money, it is worth something, honest.'

 

Tue, 09/18/2012 - 21:30 | 2809351 Buck Johnson
Buck Johnson's picture

Thats what Japan hopes, but it won't work and Bernanke knows it.

Tue, 09/18/2012 - 17:38 | 2808581 Zero Govt
Zero Govt's picture

Step 1. Economic warfare (not a winning step)

Step 2. War (not a winning step)

when will the deranged retards of Govt get it eh?

Tue, 09/18/2012 - 19:39 | 2808941 KickIce
KickIce's picture

Somewhere in between when the shot is fired and the bullet hits them between the eyes.

Tue, 09/18/2012 - 17:38 | 2808584 mickeyman
mickeyman's picture

Onward to war. Check if the Kaga, Akagi, Hiryu, Soryu, Shokaku and Zuikaku have left port.

Tue, 09/18/2012 - 18:05 | 2808689 Ineverslice
Ineverslice's picture

Divine Wind...may once again blow.

Tue, 09/18/2012 - 17:39 | 2808587 holdbuysell
holdbuysell's picture

Kyle Bass just perked up.

Tue, 09/18/2012 - 17:47 | 2808620 lemonobrien
lemonobrien's picture

i thought about that texan too; with all them nickles.

Tue, 09/18/2012 - 18:29 | 2808743 The Shootist
The Shootist's picture

Ready the Shonan Maru I & II.

Tue, 09/18/2012 - 17:53 | 2808639 redpill
redpill's picture

I can hear him smirking!

Tue, 09/18/2012 - 17:56 | 2808656 asteroids
asteroids's picture

From a demographic point of view the Japanese are done. They like the US, are hoping a whole generation of old foliks die off quick, so that a younger generation can deal with the inevitable inflation that will arise from all this money printing. The Chinese would be wonderful villans as they would kick off world inflation right at the moment Japan, Europe, and the US are at their weakest.

Tue, 09/18/2012 - 17:39 | 2808588 tu-ne-cede-malis
tu-ne-cede-malis's picture

Great.  Now Jim Rickards has a title to his second book... Of course, he called it first!

Tue, 09/18/2012 - 17:40 | 2808589 fonzannoon
fonzannoon's picture

Ben should print 2 trillion and give them one each. Problem solved.

Tue, 09/18/2012 - 18:34 | 2808763 Bastiat
Bastiat's picture

Then blame the inflation on evil speculators.

Wed, 09/19/2012 - 04:48 | 2810112 Urban Redneck
Urban Redneck's picture

Inflation is the one thing that the US excels at exporting, and in this case would drive the costs of basic necessities for the Chinese and further destabilize the regime there.  This is an ugly game of chicken.

Tue, 09/18/2012 - 17:40 | 2808591 Jlmadyson
Jlmadyson's picture

Oh this should be fun.

Tue, 09/18/2012 - 17:41 | 2808597 Neethgie
Neethgie's picture

When has popular protest ever been acceptable in china? except when directed by the chineese government?

Tue, 09/18/2012 - 19:36 | 2808933 legorf
legorf's picture

+1

If one thinks the Fed panicked when it launched QE3, what should one think of these governement-driven protests conveniently deflecting social anger towards foreigners instead of Chinese authorities?

Wed, 09/19/2012 - 05:24 | 2810138 Ar-Pharazôn
Ar-Pharazôn's picture

excellent point

Tue, 09/18/2012 - 17:43 | 2808603 BaronG
BaronG's picture

Long Kyle Bass

Tue, 09/18/2012 - 17:54 | 2808644 redpill
redpill's picture

Rong Kyre Bass!

Tue, 09/18/2012 - 17:44 | 2808607 buzzsaw99
buzzsaw99's picture

insurmountable my butt. the boj would be happy to buy them back at a discount.

Tue, 09/18/2012 - 17:44 | 2808609 booboo
booboo's picture

China just clipped a few inches off of the fuse.

Tue, 09/18/2012 - 18:13 | 2808707 Peter Pan
Peter Pan's picture

China is showing the size of her teeth to the world so that those like Australia who have tethered their wagon to China, can take note as to how the sleeping giant can turn on them at short notice.

Tue, 09/18/2012 - 17:45 | 2808611 Henry Hub
Henry Hub's picture

Is this a black swan or only Beijing duck?

Wed, 09/19/2012 - 06:44 | 2810190 Temporalist
Temporalist's picture

Cheekan make lousy house pet!  Bye bye now!  Bye bye!

http://www.nbc.com/saturday-night-live/video/ching-chang-in-love/1357153

Tue, 09/18/2012 - 17:46 | 2808616 Yen Cross
Yen Cross's picture

 This shit gets better by the hour! Don't forget the BoJ press conference sometime in the next 8 hours ;-) Wednesday, September 19

 
Tentative  JPY   BoJ Press Conferenc

Tue, 09/18/2012 - 18:03 | 2808680 Yen Cross
Yen Cross's picture

That made my day Buzz.

Tue, 09/18/2012 - 18:07 | 2808695 buzzsaw99
buzzsaw99's picture

he wouldn't even harm a fry...  lolololololol

Tue, 09/18/2012 - 17:48 | 2808622 roadsnbridges
roadsnbridges's picture

Very interesting times we rive in.

Tue, 09/18/2012 - 17:48 | 2808624 nmewn
nmewn's picture

Bonds for sale,
Appetising young bonds for sale.
Bonds that are fresh and still unspoiled,
Bonds that are only slightly soiled,
Bonds for sale.
Who will buy?
Who would like to sample my supply?
Who's prepared to pay the price,
For a trip to paradise?
Bonds for sale

Apologies to Cole & Billie ;-)

Tue, 09/18/2012 - 17:49 | 2808625 Dan The Man
Dan The Man's picture

lights...camera...misdirection !

Tue, 09/18/2012 - 18:15 | 2808713 Peter Pan
Peter Pan's picture

I think you might have meant to say......lights......camera.......reaction.

Tue, 09/18/2012 - 17:52 | 2808633 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Could it be the whole reason QEX was implemented was because Bernanke and the Fed caught wind that a massive UST selloff was coming?

Tue, 09/18/2012 - 18:07 | 2808692 Bay of Pigs
Bay of Pigs's picture

BOOM

Game over bitchez

Tue, 09/18/2012 - 19:33 | 2808920 chump666
chump666's picture

Maybe.  Bonds and equities go to sh*t during major conflicts.

Tue, 09/18/2012 - 17:52 | 2808635 negative rates
negative rates's picture

I saw them flipping $25,000 bonds left and right, just a few days ago.

Tue, 09/18/2012 - 18:02 | 2808637 Dr. Engali
Dr. Engali's picture

China has strong black swan bond kung fu .but Japan has Godzirra.

Tue, 09/18/2012 - 18:09 | 2808699 Agent P
Agent P's picture

and Donkey Kong

Tue, 09/18/2012 - 20:16 | 2809076 mjcOH1
mjcOH1's picture

and the Space Battleship Yamato.

 

But seriously, my money is on the Japanese in this one.   If it comes to a beat-down, the US needs the Japanese around more than the Chinese.    Gas might hit $40/gal and a loaf of bread may be $20.   But that beats being unable to buy either, which would be the most likely outcome for your average Chinese citizen.   The body count would be epic though.

Tue, 09/18/2012 - 17:54 | 2808643 forwardho
forwardho's picture

Do unto others and all, is it phisically possible to f--- ones self?

Tue, 09/18/2012 - 17:54 | 2808645 roadsnbridges
roadsnbridges's picture

...and here I thought Iceland would invade Greenland...oh well...

Tue, 09/18/2012 - 17:54 | 2808646 F-X
F-X's picture

I always wonder why Canada is left off so many of these graphs and tables. Most of the countries on the graph here have a smaller economy, so it's not that, and it's not geography because this one includes the US, Iceland, and Australia.

 

Are we less significant than Iceland? Sob!!

Tue, 09/18/2012 - 18:25 | 2808737 msamour
msamour's picture

I was wondering that as well, but after looking I found that our Debt to GDP ratio is not to high. It is still up there, but better than many places.

http://www.ehow.com/info_7741920_canadas-debt-vs-gdp.html

If this article is correct Canada's debt to gdp ratio is about 30%. Maybe a bit more since the last couple of years, but it's far less that the 70% average for other OECD countries.

Tue, 09/18/2012 - 19:11 | 2808857 pashley1411
pashley1411's picture

Canada, and Australia, are being consigned to their natural roles as resources depots for the Greater Chinese Co-prosperity Sphere.   So while mention them?

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