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Japan's Shocking Keynesian Slip: "We Are Worse Than Greece"
In a stunning turn of events, a Japanese Ministry of Finance official admits to Richard Koo's worst nightmare "Japan is fiscally worse than Greece". Bloomberg is reporting that, at a conference in Tokyo, Yasushi Kinoshita says Japan's 2011 fiscal deficit was up to 10% of GDP and its debt-to-GDP has soared to over 230%. What is more concerning is the Kyle-Bass- / Hugh-Hendry-recognized concentration risk that Kinoshita admits to also - with a large amount of JGBs held domestically, the Japanese financial system is much more vulnerable to fiscal shocks (cough energy price cough) than Europe. Of course, the market is catatonic in its reaction to this - mesmerized by the possibility of buybacks and hypnotized at big-banks-passing-stress-tests - though we do note the small reverse stronger in USDJPY has reversed as this news broke and the USD pushes modestly higher.
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the wheels are off the rickshaw but nobody cares
Sadly Japan is living proof that a zombified economy can be made to grind on for many decades past the date that it should have reset.
This is the legacy of Keynes, I only wish he could see the Japanese now
There is no way for Japan to go but to keep blundering along with the monetizing in an attempt to prevent total collapse. Whoever happens to be in government is completely irrelevant at this point.
Worldwide, The organic economies are being replaced with hollowed out zombie centrally planned welfare feed lots.
Japan is what we can ALL look forward too unless the beast of central banking can be slayed once and for all.
I agree! Italy is running a close second, without the export capacity!
It's all fun and games until the world economy is so fuckered up, it can no longer produce enough food.
and to think people used to shudder at the sight of Jap Zero's. Tora,Tora,Tora roughly translated means Buy,Buy,Buy
that was a great movie, highly recommend!
They can't be worse. Damn it I tell you! They have robots. ROBOTS!!!!
Maybe they can program their sleek quiet ultra-fast green robots to go into all the homes that own the bonds and perform a ultra-difficult bond-swap maneuver.
In the morning everyone will wake up and their bonds will have a haircut and they won't have any evidence it ever occurred !
Is that possible ?
Should we raise force fields ?
Mr. Roboto- Styx
http://www.youtube.com/watch?v=3cShYbLkhBc
Some dub-step, just to cheer yuz all up.
http://youtu.be/K_bOvzHMYBo
just shut it up tyler -go crawl back in your hole.
How's that Zynga poker coming?
Why all the hate bro?
It must suck to have everybody calling you Rosebud, but still....
Japanese manufacturing is moving overseas as fast as it can.
Obama's trade war moves toward China aren't going to help things either.
Sounds like a "black crane" event for Asia, starting in Japan.
How many saw the Fukushima meltdowns coming? I know I didn't. How many saw how mismanaged the TEPCO/gov't response would be? That's as good an example of a black swan/crane as any.
Sure, we knew Debt & Demographics. But Disaster too? The Swan has landed.
One really wonders what is being talked about inside China and the US.
Here is China's modern spiritual enemy on the ropes.
Irradiated. Negative population growth. Outsourcing its basic sciences and technology to China on a weekly basis. Few natural energy sources. Oil spikes. And now the whole debt crisis per Bass.
Its almost like Japan will be annexed by the US in order to keep the Chinese from invading in 2030.
The Fed owns the Japanese Debt Crisis just to counter Chinese hegemony.
How much gold does Japan have?
Its funny though. It seems like yesterday that they were paying all those Yen for Pebble Beach. They are still paying for it.
How much more un-payable debt can the Fed buy and still be taken seriously?
Good morning, really great comment. I've been wondering that about the fed for a while now. Perhaps it's too much change to go back at this point ...or even measure the situation with an old yardstick. Hate to repeat myself but my questions remain ... What must the fed continue to do to protect and expand its interests? How much more info do we all need to see that there is no 'out of bounds' at this point? What can we each do about it to protect ourselves/make money??
I'd say extricating your personal livelihood from a mass-destruction enabling currency system is a good start. There will be good money in that. It will even be real money. Not Bennie Bux.
Yours,
Beef
Wouldn't give Koo a nightmare.
For a balance sheet crisis of this sort, just stimulate until it turns around.
If it doesn't - just keep trying till it does. Or until they replace you with a new Prime Minister.
yah, the Japanese will have to sell all their US Treasuries to pay off their debt......hmmmm.
What will the US sell to pay off it's debt? Greece didn't have anything to sell.
I recommend the Japanese liquidate their US Treasuries while the Fed is paying artificially inflated prices for debt.
> What will the US sell to pay off it's debt?
New debt, I guess? So far it's been working great! USA! USA!
For years, Keynesians pointed to Japan's money printing and lack of domestic inflation to validate doing the same in the US and Europe. We know know the truth: Japanese households were stashing their fiat yen in savings accounts for retirement. The real trouble will start as those households retire and attempt to convert those bonds into spendable cash. The the money will hit the fan. Looks like that is exactly what is starting to happen.
They're concerned about their forex disadvantage, not necessarily their debt. Although, really if they have to import now, that means they're perfectly situated with a strong Yen.
That might mean that if they see higher interest rates, then theoretically the Yen will strengthen. People have been waiting a very long time for this to occur. Low Japanese interest rates means asymetric risk, bitchez. Just the same, the Yen has been on a multi-year bull market along with TIPS and Gold.
Something that you haven't seen out of Japan is negative nominal rates, where they allow the treasury bill rate to fall into the negative. So far in the west, there haven't been any restrictions on negative interest rates, since German bund rates went negative temporarily, as did Swiss rates, as did ECB rates, and U.S. rates popping in an out of negative rates.
Brillant hypotheses asshole. Japan can start importing food within the 200 mile radius of Fukushima. My friend just broke a strut on his Acura this weekend by hitting a pothole on the highway. Guess what, the car just went out of warranty. That part is on force majeure and will not be available for two weeks. Fortunately, he has a backup car. Sing me more happy tunes.
I get the message. It's all fucked.
Sorry for calling you an asshole.
That strut will cost my friend $295 less installation fees. This latest administration speech is all about the new globalization movement to Africa region. That stupid movie they just published is a propaganda tool. Just read between the lines.
Dong ... Dong .... Where is Granpa's otto-mobile ?
"eeerrrrrscrreeechpowkerash..splash......"
"lake.....
big lake...."
Johnny Sokko will aid in forseeing BOJ bailout. No worries.
http://www.youtube.com/watch?v=POsk1y68avo
/sarc
Oh my, not very conspiratorial, is it?
This can't be bullish for tin-hats.
We're in wave 3 off the tin-foil hat lows of 2007. I wouldn't short that freight train.
Not that anyone cares. Brazil just over took Japan , for the #6 global GDP spot.
Japan is 3rd...almost triple Brazil GdP
Fucka you whale..... anda fucka you debt-to-GDP!!!!
Bernanke can save the World with the US dollar, just like the game monopoly.. He'll print all the US dollars he needs and buy out Japanese debt. Monopoly was Bernanke's favorite game while growing up. It allowed him to practice buying up everything when players went broke.
You can run for a long time, not forever.
http://www.youtube.com/watch?v=IStlBOX9F4o&feature=related
repressive government rule from England
They objected to paying taxes for their defence in The Seven Years War and allied themselves to England's global enemy, France, which bankrupted itself funding American Colonists to fight the British Empire and as a consequence brought about the French Revolution because the French elites would not pay taxes.
The US Government runs Deficits and uses QE simply to avoid making US residents pay Taxes to cover Spending.........
Japan is fine. As long as you can print money, you're fine. Everything else is irrelevant in this world. You may think I am wrong, but look around you. Most people on the planet believe that Obama is a genius because oil prices are going up and jpmorgan is rich again.
don't even need to print anything in a digital economy. Just add more zeros.
They can carry this on for-ever.
The japs have a GDP 20+ times bigger than Greece... should be interesting.
And, Japanese real-estate started crashing in the late 1980's. So Japan had a head start...so its 20 years later...and levitation was only a theory. Its all in the timing.
[first title cards]
Title card/crawl:: A long time ago in a galaxy far, far away...
Title card/crawl:: Turmoil has engulfed the Galactic Republic. The taxation of trade routes to outlying star systems is in dispute. Hoping to resolve the matter with a blockade of deadly battleships, the greedy Trade Federation has stopped all shipping to the small planet of Naboo. While the Congress of the Republic endlessly debates this alarming chain of events, the Supreme Chancellor has secretly dispatched two Jedi Knights, the guardians of peace and justice in the galaxy, to settle the conflict...
"You Americans are Fat and Lazy"
You screw Oompa -Loompa's..
Loan sharks knew that if they took the dollars printing machines under their control they could suffocate the world ...they could initially suffocate USA and after taking the USA from the Americans, they could move and suffocate the whole world and take the countries from their people.
FED printed cheap money and loansharking multiplied this money in an unnatural way within the American economy boarders and they discarded them abroad so that they did not threaten USA. USA became the first state in the world with artificial “breathing”...
It cannot be possible but just in the USA for only the last year, more than one million houses were seized. It cannot be impossible but the New World has returned to tents and shelters ..has returned to the ages of Columbus. It cannot be possible that we allow to a few loan sharks looting the toils and the assets of people...
http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
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Authored by Panagiotis TRAIANOU
Who the fuck is Yasushi Kinoshita
and why the fuck should I care what he thinks?
Not that he's wrong, mind you.
His opinion is more valid than yours - he at least has an identity
Yasushi Kinoshita, Director-General for International Affairs, Finance Ministry of Japan
Thanks.
A Muppet to change soon lol
i love Japanese women
How is Kyle Bass doing after the Greek default?
Given that no one after 20 odd years of this failed Japanese monetary experiment has been able to find a solution can mean only one thing......a chaotic solution is approaching. Timing is only a secondary consideration. Preparation is the primary consideration.
my 2 cents
jap fin min is desperate becouse in this analysis, page 7
http://www.research.hsbc.com/midas/Res/RDV?p=pdf&key=2Q70z09rbF&n=282506...
jpy is lightly blue against several stock index (negatively correlated as the chf) and they instead need a positevly correlated risk off currency (red spot on the chart).
They need a weaker yen and will do everything in order to achieve the goal.
Note that gold is in the red camp against several index. Isuppose it will become blue only if the paper gold pyramid will eventually crumble.
The only blue spot surviving will be the vix.
In this post
http://www.zerohedge.com/news/cheap-macro-hedges-and-how-vix-has-always-...
ZH sayed that there are cheaper macro hedges than vix, but apart from physical gold, they are not suitable for financial retail herd.
etf that short emerging markets or ind metals like aluminium are difficult to trade becouse they either require perfect timing (em short etfs) or they have liquidity issues (like short alu and ind metals etfs).
In particular, what do u think about lvol.pa?. Is a long vix etf on paris stock excg and is an alternative to vxx for fiscal reasons
Debtzilla has escaped.
While I'm no apologist for Japan, and a firm believer that the JPY flight-to-safety meme was one of the most absurd ever conjured (and followed by dollar-bears enroute to position-reversal slaughter), it IS worth noting that the headline figures of Japanese debt-to-GDP are GROSS numbers. The NET number is in the vicinity of 120%, more like Belgium. Moreover this is only Govt debt as a % of GDP. The NET position (taking into account good corporate balance sheets, and substantial household savings) across Corporates, Households and Government sectors is nothing like Greece, or any other peripheral EA country. Of course Kyle Bass (or anyone else with a short JPY position and an interest in moving it) won't highlight that fact for you. Japan HAS issues (particularly demographics and formidable Korean/Chinese competition), but panic over a slanted headline debt-to-gdp ain't one of them.
thanks for that tip
the Japanese government is crying for a 100 yen= 1 USD return
Financial weapons of mass destruction: Like being nuked in slow motion.
i broke the dam
Trouble is the MHFT has been calling for the demise of the Yen for as long as I have been following him. His other high commitment trade for the last couple of years has been to short US treasuries. Granted, I haven't followed him much the last 6 months, but so far he's batting zero on these calls multiple times. Bottom line: the US wants the buck to depreciate against all major currencies and so far they still have the hammer.