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Four Years Of Japanese Central Planning Failure Charted

Tyler Durden's picture




 

Earlier today we presented an extended case by Caixin's Andy Xie, who is now confident that a massive 40% devaluation of the Yen is imminent and inevitable (with dire consequences for regional trading partners), as the opportunity cost, now that the Japanese economy is no longer competitive in the New Normal world (read trade surplus) of delaying what every other central banks has been doing so well (just observe the nominal surge in risk assets at 8 am this morning when Bernanke made it clear more real dilution is coming, as predicted here just yesterday), is the 3 decade long overdue pop in the JGB bond market. Yet as Xie notes, either of these two bubbles popping - the JPY or the JGB - is fraught with danger as both will confirm that three decades of central planning have failed. What is worse, Japan would then become a case study for failed central planning (yes, redundant), everywhere, but nowhere more than in the US. Which in turn, would not be a surprise to most, or at least to those who don't chase dead end momentum trends and heatmapped assets in simplistic hopes of finding a greater fool 1 millisecond into the future. It also would not be a surprise to anyone who sees the following chart from John Lohman which shows the gradual failure of central planning since the second global depression started in 2007 (and offset to date by $7 trillion in central bank private-to-public risk offset), during which time the BOJ has been forced to load up its balance sheet with substantially more assets than its GDP has grown by. Alas, this trend will accelerate which is why with time the exponential chart of central bank balance sheet expansion will only get more "exponential" until it finally pops, bringing with it an end to the truly last bubble. We can only hope we are somewhere far away when that happens.

If nothing else, Japan is the perfect case study of what happens when rates even dare to move higher. Remember: an epic surge
in average interest rates to a whopping 2% and Japan's interest expense
would eclipse the country's tax revenues, at which point it is game
over.

 

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Mon, 03/26/2012 - 21:28 | 2293079 Cdad
Cdad's picture

As always, and especially when bankers are involved, success is just off the right side of the chart.

Mon, 03/26/2012 - 21:38 | 2293105 disabledvet
disabledvet's picture

as a matter of fact...IT IS! Don't ask me to explain it. Japan has suffered the biggest industrial accident in human history...and their currency and equity market has rallied. You tell me how they do it...
http://www.youtube.com/watch?v=mvnq_W0i3Bs&feature=player_detailpage

Mon, 03/26/2012 - 21:54 | 2293153 Renfield
Renfield's picture

Isn't a mystery why their currency market rallied after that. They had to sell foreign assets to finance reconstruction - they sold a load of USD - yen went up.

Jim Willie (among others) predicted that in mid-2011.

Might have known this piece was by Andy Xie. He's one of the 'good guys' on my list of analysts that make me listen up.

Mon, 03/26/2012 - 22:04 | 2293170 BoNeSxxx
BoNeSxxx's picture

Coming soon to a country near you...

Mon, 03/26/2012 - 22:55 | 2293246 WonderDawg
WonderDawg's picture

Sorry for the OT thread hijack, but you'll thank me. Hot RT chick Lauren Lyster interviewing the hottest female brain on the planet, Janet Tavakoli.

Janet Tavakoli is brilliant, and she tells it like it is.

http://www.youtube.com/watch?v=wTWKT3pZgT8

 

Mon, 03/26/2012 - 23:05 | 2293255 AssFire
AssFire's picture
Four Years Of Japanese Central Planning Failure Sharted

 

There, by changing just one letter I rebuked the need for said chart.

(finally an area of my expertise)

Mon, 03/26/2012 - 23:34 | 2293336 I am a Man I am...
I am a Man I am Forty's picture

Lauren Lyster is smoking hot and smart.

Tue, 03/27/2012 - 00:55 | 2293459 ReactionToClose...
ReactionToClosedMinds's picture

 

Disclosure:  it is too late in the evening to listen to this ... but I will among first readings tomorrow ....

but come on .... Russia Today! >"RT" for the many uninitiated ... it is a Vladimir Putin channel .... no more, no less).    I have heard generally better analysis/useful information  on the Christian News Network or Big Bang Theory or Conan or  anybody more than on Russia Today (always excepting CNBC/MSNBC ..

 

Tue, 03/27/2012 - 02:19 | 2293561 putaipan
putaipan's picture

yeah....it's funny huh? all you have to do is get a couple of real truth telling journalists and it's better propagand than you can pay for. god bless the 'red journalism' of the keiser report and capitalaccount !

Tue, 03/27/2012 - 01:40 | 2293518 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Excellent interview:

Janet Tavakoli is brilliant, and she tells it like it is.

http://www.youtube.com/watch?v=wTWKT3pZgT8

 

I've recommended my library get her book about the Robber Barrons of Wall Street.

The USA SEC is know for: #1) zero credibity; and 2) their desire to surf the internet for porn.

Barry would get alot of cred on the street if he chose someone like Tavakoli for the SEC Chief.

Tue, 03/27/2012 - 02:31 | 2293569 Dugald
Dugald's picture

Could not get past the interviewer with the whiney voice and who  kept  tripping over her tongue...such professionalism, is that what you guys have to put up with? sheesh!

Tue, 03/27/2012 - 08:31 | 2293825 WonderDawg
WonderDawg's picture

That's too bad. The interviewer needs some polish, no doubt, but the message Janet Tavakoli delivers is worth waiting for. Besides, Lauren might trip over her tongue, but she looks good doing it. I'd love for her to trip over my tongue.

Tue, 03/27/2012 - 00:28 | 2293432 derek_vineyard
derek_vineyard's picture

japan game over at 2% 30 year yield

 

usa game over at 5%?

Tue, 03/27/2012 - 01:34 | 2293513 Western
Western's picture

5% today... 4% in a few months, it keeps decreasing.

Tue, 03/27/2012 - 00:16 | 2293416 tempo
tempo's picture

Please read www.ENENews.com for the continuing dangers from the 4 nuclear plants and radiation levels. Soil samples from 5 area in capital show radiation levels deems radioactive in the USA. Japan will likely be the first of the leveraged giants to collapse.

Mon, 03/26/2012 - 21:35 | 2293094 Tsunami Effect
Tsunami Effect's picture

DUHH ---- Of course this is a bubble!  Every Fed bubble burst, but not before they raise rates.  Just go with the flow and make some money while they are printing it.  When the printing stops, you sell.  Stop over thinking everything ZH!!!!!!!

Mon, 03/26/2012 - 21:41 | 2293115 Cursive
Cursive's picture

@Tsunami Effect

What if they don't stop printing?  What if we just hyper-inflate into economic oblivion?  What if the money's no good?  Do you really want to re-live "Cold Mountain".

Mon, 03/26/2012 - 22:09 | 2293174 gjp
gjp's picture

+1

Exactly the question.  I guess even if cold mountain is the likely outcome, if you can't do anything about it you might as well ride the wave as Tsunami effect (and so many others) is saying.  It's cynical and self-serving but understable, from the perspective of small traders like Tsunami all the way up to the power brokers like Dimon or Blankfein, and even to Bernanke, who probably also doesn't think there's anything he can do about it except extend and pretend.

What's really hard to take in all of this are the arguments (stimulus is for jobs, inflation is controlled and temporary, the government made money on its bailouts, financial wages are necessarily high to pay for the talent, ...) used in defense of an indefensible financial and economic system that is clearly now based on false pretenses where there is no rule of law or reason at the core.  I could handle and maybe even support the extend if I didn't have to swallow the pretend every day in the media, the office, and in the public consciousness.  Living a lie really eats into you.  Ignorance would really be better.

 

Mon, 03/26/2012 - 23:40 | 2293354 oldman
oldman's picture

@gjp

Cold mountain life is pretty good----lots of zen poets---an occasional taoist or two---great water, birds, rocks, trees, peace, silence, magic

yams, carrots, onions, beans, corn, broccoli, cabbage, lettuce---many things taste grewat raw or cooked when grown there

I liked my life on cold mountain because really cold brrrr-like was 56F. and really sizzling hot was 84F.------------ twelve hours of daylight twelve months of the year------------

I'd be there still, but then I wouldn't have all of this wonderful companionship at ZH

as a consolation prize                                thanks    om

Mon, 03/26/2012 - 23:45 | 2293364 Dr. Engali
Dr. Engali's picture

They have to print. There is no turning back now. Greece is the perfect case study. Trying to cut back the debt through austerity just killed the economy and sent Greece into a debt spiral. That's the predicament we are in except there won't be anybody there to " bail us out" because there isn't enough money on earth to buy our debt. So the have to print.

Mon, 03/26/2012 - 21:42 | 2293118 Atomizer
Atomizer's picture

Please detail your FED exit plans, inquiring ZH posters are interested in your approach. You realise this is a baited question, and you began the overthinking bit.. Show us your Tsunami firewall calculations. LOL

Mon, 03/26/2012 - 21:36 | 2293099 Demonoid
Demonoid's picture

MITI turned out rather SHITI, eh?

 

Mon, 03/26/2012 - 21:38 | 2293109 Cursive
Cursive's picture

Japan implodes some date in the not-too-distant future.  The buses are still running in Amerika, but what will be the first big sign that the facade of our "recovery" has cracked?  Will it be national martial law?  What will Japan look like?

Mon, 03/26/2012 - 21:55 | 2293157 Caviar Emptor
Caviar Emptor's picture

For Japan and the US (and most everywhere in the developed world) it will be a burnt out exurban sprawl. Discount strip clubs, video poker parlors, fast food joints, drug supermarkets, discount clothing outlets. Mexican drug gangs ruling the night. Public hangings by day

Mon, 03/26/2012 - 21:58 | 2293158 Cursive
Cursive's picture

@Caviar Emptor

Who knew GTA or Saints Row was a glipse into our collective future?

Tue, 03/27/2012 - 00:17 | 2293418 Vic Vinegar
Vic Vinegar's picture

Are you a gamer, Cursive?  Hit me up on the PS Network if you are.

Seems like what Caviar Emptor is describing is the Wild West, just updated for modern times.

Mon, 03/26/2012 - 22:19 | 2293191 Shit Floats to ...
Shit Floats to the Top's picture

Pottersville for everyone!

Mon, 03/26/2012 - 22:25 | 2293202 marathonman
marathonman's picture

"Who runs Bartertown?"

Mon, 03/26/2012 - 23:08 | 2293275 Dr. Engali
Dr. Engali's picture

So nothing changes then right ?

Tue, 03/27/2012 - 02:37 | 2293575 Dugald
Dugald's picture

Christ! sounds like "On the Beach"......aw bugger!

Mon, 03/26/2012 - 23:10 | 2293270 i-dog
i-dog's picture

I would place a strong wager that the bankstaz will prop up Japan and Europe longer than they will the US. There is lots of printing to come, but things are moving far faster in the modern world -- especially with the levered derivatives -- than they did "back in the day" of Weimar and Great Depression 1.0.

(Note: There was no hyperinflation during GD1; the cause of GD1 was primarily banks sitting on cash rather than lending. Sound familiar? The money supply didn't start to expand until after the outbreak of WWII. Ben isn't printing banknotes...he's simply padding bank balance sheets -- at home and abroad!).

It still looks (to me) like late-2012 is their endgame, at the rate things have been falling apart over the past 3 months.

Mon, 03/26/2012 - 23:28 | 2293300 Mike in GA
Mike in GA's picture

@cursive

 what will be the first big sign that the facade of our "recovery" has cracked?

Ignoring the assumption of a recovery at all, I'd suggest what we are seeing right now in the price of oil and gas would consitute a "crack".  Not to mention with 12 of 14 leading indicators pointing south, the failure of our elected leaders to act as leaders while our bureaucrats act exactly as the inefficient, politically protected, tax-raising leeches they are would be yet another crack as America lurches deeper into decline.  But the REALLY BIG CRACK will be when the money becomes worthless.  Prior to the global awaremess that the 'good as gold" currency isn't, we will go on using the same set of denials and can-kicking.  On the day we awake to find that 'Faith' is missing from the the "full Faith & Credit" of all 15 Trillions of USGov Credit, we shall know with certainty that this time it really is different.  When we can't buy more "credit" at Zero%, when rising rates force another tax on the backs of maxed out taxpayers, when the global race to devalue to attain some competitive exporting edge finds all countries winning that plunge to the bottom then we will learn Austrian Economic Theory all together, as a nation, as a world.  Particularly the KaPoom! part.

National Martial law?  I wouldn't think so.  Look at Syria today.  Force can only achieve so much.  It can't create wealth nor coerce productivity.  An American attempt at martial law would invite a 50-state revolution, with the possible exception of Vermont, and of course, the 51st State, the District of Columbia.  Can anyone see the Martial Law Authorities, whomever they might be, getting out the really big guns to pacify the newly impoverished unruly? What will "they" do, nuke Sacremento to provide an example to LA?  Watch Syria to see how this plays out. 

What will Japan look like?  Kyle has the best take on that - shrunken, broken and living with some unpleasant realities.  Saving face will become less important than feeding it.

Mon, 03/26/2012 - 21:41 | 2293116 DavidPierre
DavidPierre's picture

Chris Martenson warns of a weak Yen being Japan’s problem going forward – not the strong yen all expect.

http://maxkeiser.com/

Mon, 03/26/2012 - 22:28 | 2293119 gangland
gangland's picture

sub-prime sushi

that's beautiful

http://www.youtube.com/watch?v=5CNIAHEzEOQ

i quit eating sushi, i can handle pcbs, plastics, lead, cadmium other heavy metals, whatever etc but not radiation...too bad or

..actually prolly good for the planet,

i mean if my poor ass could afford maguro/toro...actually it shulda been a sign of the utter failure of globalization and neoliberalism...

i can live without it, but i'll miss it, i wonder what they'll say in 25, 50 or 100 yrs about my class

eating sushi

and what that consumption ultimately meant for the planet and sapiens

....until fuku came along....

bye bye japan :( at least it wasnt too big a land mass, even though you've now fcuked up the oceans for millenia

 

possibly for the age of the entire solar system

but if ur japaneses, dont feel bad, it has nothing to do with being japanese

the species is a dead end, an evolutionary mistake,

bound to happen, i mean look, depleted uranium powder never ever goes away and will always circulate in soil or air or water

and whoever did that wasnt directly japanese

it would be cliche to say fuck ldp dpj meti ozawa blah blah

amakudari blah congress regulatory capture ge

rockedyne westinghouse boeing blah blah profits blah earnings blah wall street FIRE eCONnomy

it is what it is cliche or not

 

 

 

how one species can fuck up the very life force on a planet for billions of years is beyond me

 

mean reversion will be a bitch

Mon, 03/26/2012 - 21:42 | 2293121 gwar5
gwar5's picture

Boy, Kyle Bass really had Japan nailed a couple of months ago when he said they were looking bad and going down fast.  I think all those million nickels are going to pay off too since I think I read Obama wants to change the composition again or get rid of them.

Mon, 03/26/2012 - 21:45 | 2293125 Temporalist
Temporalist's picture

I don't see what the problem is. Japan just needs to print more.

Mon, 03/26/2012 - 22:55 | 2293247 WestVillageIdiot
WestVillageIdiot's picture

Don't think that isn't the plan.  Bernanke, like Cortez, has burned his ships.  There is no going back.  He has a full supply of muskets, musket balls and diseased blankets in his possession.  He is ready to carry out the dreams he has had since first becoming "the foremost expert on the Great Depression".  Soon it will be cold and people will be begging for those blankets. 

Mon, 03/26/2012 - 21:45 | 2293126 Caviar Emptor
Caviar Emptor's picture

Overheard at BOJ....'we cannot lose face....set printer to turbo'

Mon, 03/26/2012 - 22:57 | 2293249 WestVillageIdiot
WestVillageIdiot's picture

All central bank printers now have 10Gigabit Ethernet cards and the networks are all running fiber backbones. 

Mon, 03/26/2012 - 21:45 | 2293128 kito
kito's picture

Happy belated birthday to me...... 1 year and 2 days on zh....im definitely not the same since my birth into the "real world"......

Mon, 03/26/2012 - 21:51 | 2293143 Cursive
Cursive's picture

@kito

I didn't think you'd stick around, but glad you did.  Since it's your 1-yr. anniversary, celebrate with an extra stockpile of toilet paper or ammo.  ;D

Mon, 03/26/2012 - 22:26 | 2293207 kito
kito's picture

Thanks cursive, How could I not stick around??.....i eagerly anticipate the members only, shtf, told the world so bash at tylers highly fortified compound..........i will bring plenty of t.p.and ammo......

Mon, 03/26/2012 - 22:58 | 2293253 HD
HD's picture

Don't get those confused - or it will bring a new meaning to "shoot the shit"...

Mon, 03/26/2012 - 21:45 | 2293129 Clifhanger
Clifhanger's picture

You heard it first, from Kyle Bass. His high strike lotto payers will surely pay off maybe sooner than many expect!

 

Mon, 03/26/2012 - 21:47 | 2293132 Paracelsus
Paracelsus's picture

I can't stop thinking about those Godzilla movies where he goes stomping through downtown Tokyo.

The other thing is that a large part of the Japanese economic miracle was made possible by millions of small savers using a post office savings account which was a brilliant idea.(Saving,what a neat idea!).

If this report is accurate about the Yen/Bond meltdown then I would put a big question mark over the stability of the Asian region (read war).Thank God we have all of our carriers in the right spot!

Mon, 03/26/2012 - 21:54 | 2293154 Atomizer
Atomizer's picture

Heed no fear!! Johnny Sokko has been summoned to the rescue.

Mon, 03/26/2012 - 21:50 | 2293141 Jason T
Jason T's picture

Give us 20 years, we'll be in the same position.. our oil consumption is already down from 22 million bpd to 18 million bpd in that same period.. some how our GDP is up.  

Mon, 03/26/2012 - 21:53 | 2293150 MeelionDollerBogus
MeelionDollerBogus's picture

Just wait till this happens to the USD. Won't be waiting long.

Mon, 03/26/2012 - 22:19 | 2293190 mayhem_korner
mayhem_korner's picture

 

 

 

I agree it will happen, but "soon" is the forecaster's worst enemy.  It's only been 100 years since the formation of the Fed, and 51 since the abandonment of the gold standard.  They can't keep this up forever, but they have more stamina than by rights they should.

If a couple more sovereigns (Japan, Spain, Portugal) go paws up, then it would seem things would accelerate pretty quickly.

 

Mon, 03/26/2012 - 23:01 | 2293259 WestVillageIdiot
WestVillageIdiot's picture

I believe you mean 41 years ago when the room got too cold and Nixon decided he had to close the window. 

Mon, 03/26/2012 - 21:53 | 2293152 virgilcaine
virgilcaine's picture

Would this be USD positiive or negative?  thks in advance for my ignorance on this.

Mon, 03/26/2012 - 21:55 | 2293156 bag holder
bag holder's picture

Depends which side of the bed Ben wakes up on tomorrow.

Mon, 03/26/2012 - 22:16 | 2293184 mayhem_korner
mayhem_korner's picture

 

 

Any event that threatens to collapse (partly or wholly) another currency would boost the USD in the short term.  This is both because of the presumable selloff in the yen and the flight to the dollar.

But keep in mind this is a true "last man standing"...the flight to safety is illusory as USD will eventually face the same fate.  All the sheep will be packed into the last pen, the USD, before being ushered into the slaughter house.

Mon, 03/26/2012 - 23:01 | 2293262 WestVillageIdiot
WestVillageIdiot's picture

Next you are going to tell me that my Continentals aren't worth a Greenback.

Mon, 03/26/2012 - 22:02 | 2293165 ekm
ekm's picture

As long as they can export, they will print endlessly and control endlessly. Once the world does not need their exports when somebody else makes stuff cheaper (china) and better (south korea), then they are screwed. It looks like the screwing moment is getting very close. They are getting old and less precise (toyota!!!). South Koreans are catching up on the quality side.

Moreover, who in the world has the power to import right now?

Mon, 03/26/2012 - 22:18 | 2293188 Atomizer
Atomizer's picture

Did you already forget about Obama/WTO/China rare earth elements dispute? Africa is the new playground for Globalization business migration. Winks.

These elected empty suits are just as predictable as when my girlfriend is about to get her monthly PMS cycle.

 

Mon, 03/26/2012 - 22:07 | 2293172 Tsar Pointless
Tsar Pointless's picture

I don't know about you, but I see everything as coming up bullish.

Honestly, I thought last Monday would mark *the* top in equities. But what the fuck do I know? I'm just a pointless ol' Tsar.

I have a little rhyme for ya'll!

There once was a man who looked ghoulish
Whose every idea appeared foolish
But armed with a printer
He gave bears many a splinter
And forced all of us to be bullish

I am a poet, and thanks for asking, I do know it.

Mon, 03/26/2012 - 22:11 | 2293177 mayhem_korner
mayhem_korner's picture

 

 

For a minute I thought the red line was the seivert readings at Fukishima and the blue was the fish population.

Mon, 03/26/2012 - 22:13 | 2293178 Whoa Dammit
Whoa Dammit's picture

OT:  Today, after 3 years of governmental harassment, the Roswell "Chicken Man" Andrew Wordes, blew himself up inside his house. It has made national & international news.

http://www.dailymail.co.uk/news/article-2120768/Andrew-Wordes-Chicken-Man-kept-roosters-backyard-commits-suicide-house-explosion.html

I live just outside of Roswell. It is a small place in the north Atlanta suburbs known for its speed traps, upper middle class transplants with illusions of grandeur, and for aiding Sherman during the Civil War. What the MSM isn't covering in this story is a frightening tale of abuse by the City of Roswell that was enacted toward a man who just wanted to have some chickens in his backyard. The vendetta against him after he won two lawsuits that allowed him to keep the chickens, is like something from a Hollywood script. lt left him in finacial ruins and sadly destroyed his life.

http://www.examiner.com/buzz-in-atlanta/roswell-chicken-man-stands-alone-against-city-hall

"An 84-year-old woman who held the mortgage on his house was allegedly harassed by the city to the point of selling his mortgage off for forty cents on the dollar -- a mere $50,000. And now it's allegedly held in a blind trust. No one knows who paid for said property."

"Roswell police escorted Wordes to jail the day he was ordered to bring proof of a lawsuit he filed against the city to the court. The paperwork would've halted, or at the very least delayed his bankruptcy and the foreclosure on his home.  Wordes was jailed for violating his probation. He pled guilty to grading his property without a permit. According to Wordes, the person who lent him the bobcat to grade his property was Roswell Mayor Jere Wood."

More from a local blog:

http://theperspicaciousconservative.com/2011/08/06/the-roswell-chicken-man-and-his-fight-for-his-constitutionally-awarded-rights/

This is how it all started:

"December 2008: Roswell Zoning Department issues a warning for the chickens on his property. (At that time, the City of Roswell’s Code of Ordinances said “On less than two acres you MAY NOT have livestock except for poultry and swine.”) The City decided to issue a citation anyway. "

another exerpt:

"The City of Roswell files a 55-page civil suit against Mr. Wordes in an attempt to take his property from him. This is the first civil suit to attempt to take a man’s property in the history of Roswell. A civil suit was filed in attempt to deny Mr. Wordes his right to a public defender, as he can no longer afford to pay for representation.."

Mon, 03/26/2012 - 22:16 | 2293181 virgilcaine
virgilcaine's picture

Goodbye 0 % JGB Yields, Goodbye Yen Carry Trade, Goodbye Mkts.

Mon, 03/26/2012 - 22:57 | 2293182 LiquidityandLunacy
LiquidityandLunacy's picture

Again, as I have said before, Japan WILL NOT devalue its currency to any serious extent. As referenced by this very site by Tyler, Japan has failed for YEARS at devaluing its currency because it simply does not have the ability to sustain the weak Yen as they fail each and every time, most notably recently. Secondly, if the Yen devalues, everyone will competitively devalue because they will have to, making the initial move parabolic since the USD CANNOT gain strength and the euro CANNOT gain strength for risk of ka-boom.

 

Remember if youre keeping score, Japan according to the previous article is an energy and materials importer and as long as said items are not something you can simply print more of, Japan will have a hard time getting all of that with their weak Yen.

 

The status quo will remain as the ability to print a 40% devaluation to "save" Japan is simply out of the question and while the author and Tyler bring up some VERY valid points, the fact remains that as soon as that printing press starts with any conviction, its already over and we have not seen that conviciton yet for a reason.I'm gonna put on my conspiracy theory hat and say that another natural disaster (N Korea) or the continuation of fuku could be a planned IMF bailout of a state of emergencied Japan.

 

Nothin says loving like a blank check from uncle sam

 

 

EDIT:

 

And whoever junked me, please prove me wrong or at least say why.

 

 

Mon, 03/26/2012 - 23:09 | 2293276 WestVillageIdiot
WestVillageIdiot's picture

When I first started looking at such things as the Yen exchange rate, probably about 2006, there were 120-something yen to the dollar.  They could have a whole lot of devaluation and still be above those levels of less than 10 years ago.

I was not your junker. 

Tue, 03/27/2012 - 00:36 | 2293436 LiquidityandLunacy
LiquidityandLunacy's picture

The world was a lot different in 2006 my friend.

Mon, 03/26/2012 - 22:39 | 2293205 hyper-critical
hyper-critical's picture

Intermediate to long-term, completely agree with the zhedge/KB analysis of what lies ahead for the yen and Japan. Good to joke about and have a bit of a laugh as the situation is almost too absurd, tragic, and predictable to be real.

But on to making fiat in order to procure real assets before anarchy takes over - I think there's the potential for a real good long yen trade here.

The sell side/mainstream doesn't get something like this wrong for twenty years, see market action completely reverse, read a bloomberg article or two about some obscure concept like convexity of their debt burden and get to be right on this trade. If we get a major pullback in risk assets (perhaps as people start to realize Lakshman is right) and Japan gets even a slight bump in trade data, the structural role their bond market plays in int'l trade (that, don't fool yourselves, hasn't changed...yet) could be enough to trigger a sharp (but not unusual after a move like the yen's had) counter-trend rally just to fuck the consensus.

Being repelled off a confluence of technical/demark indicator levels across time frames, and got some short term stuff confirmed going the other way.

Disclosure: Long Tricia Takanawa/Short Mandy Drury

Mon, 03/26/2012 - 22:37 | 2293222 Alexandros
Alexandros's picture

 

Global Debt Crisis

The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?

They would start conquering Europe from the conquered Germany. The new Americano-european “USA” would be “born” in Germany. To go on with their overprofit activity, it was not enough just to "invest" in Europe, they had to buy it up. It should belong to them absolutely, as did the USA. They should control it not just politically but also financially ...and of course monetarily. There was no other way. Everything starts from the currency control ...as the “patriarch” of the loan sharks, Rothschild, said. They could not keep playing their games without the money “press” under their control. They should create the new “FED" of the new American-European economy. Germany was necessary for them to achieve this goal. They needed them exactly like someone who has a “pump” needs a “valve” ...they needed it to create a constant reservoir of “sub-pressure” in Europe ...a “sub-pressure” reservoir that would keep pumping money from the USA and transfer them to the rest of Europe.

All these have happened so that the loan sharks get ahold of the peoples’ countries assets. Now, these “Markets” hit the states one after the other so that the loan sharks could grab the peoples’ countries.

 

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

 

----------

 

World War III - The First Private War in History

Those who won all battles shall lose the war.

 

http://eamb-ydrohoos.blogspot.com/2012/02/world-war-iii.html

Authored by PANAGIOTIS TRAIANOU

 

Mon, 03/26/2012 - 22:36 | 2293223 slewie the pi-rat
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we see about 1/2 the balanceSheetBloat after the tsunami & fuk_u (3.11)

as i said this morning, on the andyXie "prediction": 

  • japan has already devalued
  • china is kinda pissed

no, exponential isn't sustainable, but i already knew that, even yesterday, before XIE-day!

paste:  Caixin Media Company Ltd. is a Beijing-based media group providing financial and business news and information through periodicals, online, conferences ..

you do your own math... 

somebody needs to...

Tue, 03/27/2012 - 05:11 | 2293666 Gatts
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+1 Japan has already devalued

Mon, 03/26/2012 - 22:36 | 2293224 Subliminal messenger
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First post... I'm short Japanese 10-yr debt and I'm looking for a currency to short the Yen with, but which one?

I don't trust the USD one bit. Could the Euro be a safer short term bet? I'm talking about 6 months or less.

Mon, 03/26/2012 - 23:04 | 2293266 Dr. Engali
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Eighth rule of fight club is... If this is your first night at fight club you have to fight.

Don't come here looking for investment advice do your own due diligence. Don't compromise the Hedge next thing you know some trial lawyer will be up Tyler's ass because you went broke in your E-trade account. Oh yeah... Welcome to fight club.

Mon, 03/26/2012 - 23:24 | 2293311 Subliminal messenger
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Ok. Understood.

Thanks for the welcome.

Mon, 03/26/2012 - 23:32 | 2293327 Vint Slugs
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Welcome and ignore some of these fightclub guys, even if ZH is the metaphorical club. 

If you're already short their debt, why put all your eggs in the basket by shorting the yen against another fiat?

How about this:  the Yen/Gold ratio is presently going into new monthly high ground in the secular advance that began in 1999 (but still below its 1980 high point).  Go with that 13 year trend and borrow Yen to buy gold.  There - you've got a yen short with no fiat counterparty risk and virtually a lock on the Yen losing its ass to gold over time.

Tue, 03/27/2012 - 04:32 | 2293647 Subliminal messenger
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Good thinking, but I already have a bunch of physical gold and even more silver. It's my lock on the Euro losing its ass to gold. I'm bound to win that trade.

I've been waiting for a price correction in precious metals, but it's very unlikely with all this printing.

Tue, 03/27/2012 - 07:12 | 2293736 Ghordius
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the euro might be one of the two worst currencies of the world to do this specific bet in the medium and long term...

Mon, 03/26/2012 - 22:39 | 2293226 WoodMizer
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I'm turning Japanese Bitchez

http://www.youtube.com/watch?v=kWAwrMFtSvM

Mon, 03/26/2012 - 22:43 | 2293232 babylon15
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more stimulus needed.

insert more stimulus.

Mon, 03/26/2012 - 22:45 | 2293235 Spastica Rex
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Who, exactly, did it fail for? The policy makers? The bankers? Please. Who the fuck else matters?

SPOILER: Nobody; you sure the fuck don't matter and neither do I.

Mon, 03/26/2012 - 22:59 | 2293256 Dr. Engali
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Japan may be a case study for failed central planning, but that will never stop them from trying again and again.

Tue, 03/27/2012 - 00:50 | 2293449 putaipan
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just dropping in some stray thoughts... and a question.

i'm starting to think those chinese 'ghost cities' are gonna fill up with glowing japanese expats.

i wish someone would give ben fulford 8$ so we could read his latest on the white dragon/black screen banking system. ( the guy is soooo gulible but some of the people whispering in his ear do know some deep shit. especially interesting with the new korean anthropoligist cum world banker). sometimes i think what fulford thinks is gonna save the world is actually nwo asian quadrant plans unfolding perfectly . see- 'ghost cities' above.

now for a question- i thought 'currency wars' were about who can devalue the fastest, and that the printing was to keep some semblance of strength ... these seem like opposing monetary forces with the same result.  am i barking up the right tree?

 

Tue, 03/27/2012 - 01:15 | 2293480 xtop23
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The currency war is the rapid devaluation of the world's currencies to promote domestic exports and thereby boost GDP and decrease trade deficits.

The semblance of strength is maintaining a relative equality of all currencies as they race to the bottom but everyone wants to be just a little bit more devalued than the other guy so they have the advantage.

At least that is my understanding.

If someone can explain this better or correct me where I'm mistaken I would love to hear it and learn a few things.

Tue, 03/27/2012 - 01:26 | 2293509 putaipan
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thanks- i'm with you on your first paragraph, but on the second is where

i'm stuck- seems like they are opposing forces (even if too simplistic-

kind of seems like the root of our shcizophrenic bifutrified-flation) but

which becomes more important as we reach the end of the game?

 

update- swamp musta paid ben his 8$.... the requested article is up on the

On The Price Of Gold thread. just for shits and giggles. (oooh, tyler head !)
Tue, 03/27/2012 - 01:38 | 2293519 xtop23
xtop23's picture

Maybe you're confusing strength of one currency as it relates to other currencies as they are simultaneously devalued and trying to somehow make that jibe with the weakness of the currency as it affects the end user ( the population of the country said currency is weakened in ) i.e. inflation.

Tue, 03/27/2012 - 01:00 | 2293469 xtop23
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It's pretty awful to say, but honestly I almost hope Japan blows up soon financially because then those dipshits in government will finally stop using them as an example of the "muddle through" philosophy and how it can work here in the US.

Tue, 03/27/2012 - 01:17 | 2293500 drwillia1
Tue, 03/27/2012 - 01:24 | 2293507 q99x2
q99x2's picture

Hey even CNBC doesn't talk about paying back debt. No one has to ever worry about that. Makes no difference any more. What is more important is how much you can get before the ship goes down. Without law its a free for all. YeeeHaaaa.

Tue, 03/27/2012 - 01:41 | 2293522 tok1
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This type of article will piss off the BOJ.. its the sort fo thing that will get them buying  The Japanese are homoginious.. and committed to Japan. For patriotic reasons they will not sell their JGB's on mass they will suffer under the depressed low rates slow growth. The Govt already has 40% inheritance tax and prob it will go up to 50-70% along with the consumption tax rise.. so the Govt will get their bonds back from the people in the end. Remeber WW2 no Japanese unit surrendered despit large losses.. It will be the same here..(JGB's already squeesing higher and todays fiscal year end for bonds (they settle T3) ,, The MOF still controls the postal funds (worlds largest savings) JGB 92% domestic owned.. They like foreigners selling cause when they squeese them out they end up supporting the market..

Tue, 03/27/2012 - 02:12 | 2293551 ebworthen
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So central bank "assets" are just printed (digitized) money or really debt (loans on the future) that are floated on the hope that interest rates don't go up; whereas GDP represents something that is produced, correct?

So...how can you make something out of nothing - yet make less of something tangible - and believe it will work?

Tue, 03/27/2012 - 02:32 | 2293570 tok1
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the Govt is borrowing their own people's money.. and will get it back in inheritance tax when they die.. The US does not have the savings to support its Govt lending.. so their at the mercy of foreigners that own their bonds..    If they Japanese people stop using their increased savings to support the Govt their will be a problem.. but Japan is basically socilast / communist.. so they will keep giving their funds to the Govt to maintain social stability. Its a philisophical difference Japanese.. are willing to sacrifice themselves /assets for the group.. and they see death as a part of human life cycle.. Westerners focus on their own wealth personal development and  (maybe cause of media) think if they eat well exercise  and get lots of money some how they will get eternal life.. ie I remeber an interview with AL Gore.. and the reporter asked so if we make all the changes you suggest, will we all avoid death and he laughed and said yes its not too late but we have to act now..... (mm but actually everyone is going to die right) no matter how much you try to control your enviroment..  

Tue, 03/27/2012 - 07:07 | 2293734 Alex Lionson
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As far as I remember "Kamikaze" is a Japanese word.

Tue, 03/27/2012 - 07:36 | 2293751 Gatts
Gatts's picture

Savings in Japan are steadily dropping and inheritance is being spent. It has been 20 years since the bubble burst and the dowry has been eroded to bonds bought during the good years (supplying the avg. person with a small amount of funds) and ageing houses that are at best worth the land they sit on.
Younger people are completely disenfranchised with the govt and have stopped contributing to compulsory pension funds years ago knowing they will never see a pension. This type of behaviour will keep perpetuating itself especially now after the horrendous job the govt has done in covering up and fudging data from Fukushima.
The average person in the street is more concerned with the well being of their family and are not lining up to pledge their dying support for the greater good. Bonds will be sold down to pay for age care.
Print they have and print they will, Pi Rat is spot on, the Yen has already been devalued. How much further can they go, how much more can the population bare? There is no way Americans would eat humble pie for that long.
With the coming energy crisis this summer the heat is going to turn way up.

Tue, 03/27/2012 - 08:47 | 2293852 tok1
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it may all blow up one day.. but todays not the day... JGB look firm.. seems like open tomorrow above.. highs 131.85  with fiscal new year buying might see,  big spike.... The initial guy was discussing being short JGB.. its better to get set after the squeese.. than while its squeesing..when the 7ys hitting the wall 0.54-0,57% area,,

 

 

Tue, 03/27/2012 - 09:16 | 2293916 tok1
tok1's picture

the reality is on any given day if the MOF and BOJ really want to strengthen then yen and support JGB's (even more than now) they can simply sell some of their massive Tres/ or EU holdings.. then sell USD or Euro and buy Yen and then JGB's.  The US doesnt have this escape they can only raise rates..

 

 

Tue, 03/27/2012 - 10:10 | 2294093 Thamesford
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The plot looks like the jaws of a crocodile that is about to snap shut!

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