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Old 09-19-2012, 08:54 AM   #1
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Japan not to be out done (global QE watch)

With the Euro and USD actively printing, Japan must keep up!
http://online.wsj.com/article/SB1000...=djemalertNEWS
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Old 09-19-2012, 09:10 AM   #2
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Related article on the "Race to Debase"
http://finance.yahoo.com/blogs/break...113550179.html

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Old 09-19-2012, 09:19 AM   #3
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Old 09-19-2012, 09:51 AM   #4
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Currency Wars in fully operational mode. That is unavoidable - if one of the major economic powers starts debasing their currency, that makes them immediately more competitive on the international market (it takes less Yens, Euros, Sterling, to import stuff that is originally priced in Dollars, has it's manufacturing costs bound to Dollars, for example).

But... everyone is in the same boat, everyone is in that "beggar thy neighbor" mode, to feed the monster of perpetual debt owed to banks/central banks - remember the only way to pay country's debts, is to reach out into someone's else monetary supply - the interest owed on country's debt (all of it: national, corporate, individual) was never borrowed into existence, only capital was.

Thus, they are tramping over each other to cheapen the currencies, to outdo other central banks, and to spur the competitiveness of the local economy in the global market, by cheapening local currency.

Problem is, it always ends badly - with the weakest getting the hard end of the stick earlier (PIIGS, anyone?). But it spreads further, when there's less and less weakling countries left to take advantage of, and it will get to the strongest in the end as well - that's just math.
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Old 09-19-2012, 10:01 AM   #5
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Yep. BOE & PBC eased just before ECB. Fed was late to the party with QE+ and Japan is now jumping in after just getting their toes wet before. Not to mention peg defending actions by the Swiss, et. al. Whole lotta printing going on...
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Old 09-25-2012, 02:00 PM   #6
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Quote :
China’s central bank added a record 290 billion yuan ($46 billion) to the financial system using reverse-repurchase agreements, seeking to address a cash squeeze in the run-up to a weeklong holiday.

The People’s Bank of China conducted 190 billion yuan of 28-day reverse repos and offered 100 billion yuan of 14-day contracts, according to a trader at a primary dealer required to bid at the auctions. Today’s total is the highest for a single day in Bloomberg data going back to 2004.

“Record amounts of reverse repos are to meet the surge in cash demand before the quarter-end and the holidays,” said Liu Junyu, a bond analyst in Shenzhen at China Merchants Bank Co., the nation’s sixth-biggest lender. “As the central bank steps up adding funds through reverse repos, it’s unlikely to cut the reserve ratio this month.”
...
China’s monetary authority also auctioned 40 billion yuan of six-month treasury deposits to commercial banks on behalf of the Ministry of Finance at a yield of 4.32 percent, according to a different trader. That compared with yesterday’s six-month Shanghai interbank offered rate of 4.09 percent.

The PBOC lowered the amount of cash lenders must set aside as reserves in May to 20 percent, the second reduction this year.
...
http://www.businessweek.com/news/201...se-cash-crunch
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Old 09-28-2012, 07:20 AM   #7
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Quote :
... In Japan today, new data shows consumer prices dropped by 0.3% compared with the previous year, while new industrial output data disappointed.

Unsurprisingly given central banks’ deflation phobia and the Japanese authorities’ determination to weaken the yen, the Bank of Japan looks set on further money printing. BoJ board member Takehiro Sato commented in an interview two days ago that "we won't hesitate in taking additional monetary easing steps if we feel that risks have heightened enough and that the economy may undershoot our forecasts even after this month's monetary easing". HSBC Securities expects the BoJ to expand asset purchases by another 5 trillion yen (US$64 billion) before the end of the year.
...
http://www.goldmoney.com/gold-resear...purchases.html

~~~

I thought this was interesting - especially in light of the news posted just a couple of days ago in the previous post:
Quote :
... China is cornered by inflation concerns and unable to ease aggressively - has now been confirmed by none other than the Bank of China and Bank of Korea themselves. As the WSJ reports, "The rise in global liquidity could lead to rapid capital inflows into emerging markets including South Korea and China and push up global raw-material prices."

The latest round of easing by the U.S. will increase inflationary pressures for emerging-market economies, Mr. Chen said. "This contributes to a monetary-policy dilemma for Chinese authorities", he added. While markets have looked for signs of more forceful action by China's leaders to rekindle growth, some officials attribute the government's caution to fears of reigniting inflation.

This confirms previous comments by the PBoC that "A domestic policy may be optimal for the U.S. alone. However at the same time it is not necessarily optimal for the world," he said at the time. "There is a conflict between the U.S. dollar's domestic role and its international settlement role."
...
http://www.zerohedge.com/news/2012-0...join-ease-fest
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Old 10-10-2012, 06:40 AM   #8
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Quote :
... the Reserve Bank of Australia did join the monetary easing party yesterday, and announced a rate cut of 25 basis points (to 3.25%). This is the RBA’s third reduction in six months, with news today that the country has recorded its biggest trade deficit in three-and-a-half years a sign that the decline in commodities seen over the last year-and-a-half is starting to hurt the Aussie economy. The Australian dollar moved down a little following the announcement, but not that much given that the market had already priced in a rate cut.

This serves as a reminder though that as far as savers are concerned, there are no “good” currencies out there. All are being debased in the name of political expediency, and losing absolute value at an ever-greater pace.
http://www.goldmoney.com/gold-resear...the-party.html
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Old 10-10-2012, 09:31 AM   #9
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...interesting, how cutting the rates by Aussies will influence their housing market - I am not following, if it is already collapsing bubble, or not yet..

This is like watching a global train wreck in a slow motion... Once you have figured out how it will all play out, it is fascinating to watch the show that TPTB are putting up, for citizens' pleasure...
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Old 10-10-2012, 09:40 AM   #10
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I tried to visit the Silver Stackers forum to get an Aussie perspective on the issue, but the site appears to be down right now ("account suspended").
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Old 10-10-2012, 09:52 AM   #11
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Originally Posted by PMBug View Post:
I tried to visit the Silver Stackers forum to get an Aussie perspective on the issue, but the site appears to be down right now ("account suspended").
That is interesting, I am getting the same issue. I wonder what is the issue?
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Old 10-11-2012, 08:34 AM   #12
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SS is back online. I posted a thread:

http://forums.silverstackers.com/top...-rate-cut.html
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Old 10-11-2012, 03:49 PM   #13
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Zero Hedge yesterday posted an item on Ireland, suggesting that we not forget about Ireland's debt, which IIRC (a big if) is even higher than Japan's debt / capita.

LOTS of countries are in trouble, like I have to say that here?!?!
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Old 10-12-2012, 09:13 AM   #14
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Originally Posted by PMBug View Post:
SS is back online. I posted a thread:

http://forums.silverstackers.com/top...-rate-cut.html
Looks like that site is down again. Here is what is showing now:

"Forum temporarily closed
12th October 2012 - the web host for Silver Stackers has closed our hosting account. We believe this is a result of recent denial-of-service activity against the forum.

Obviously we're not particularly happy with this particular course of action, and are working to resolve the issues and restore the forum.

Progress updates will be posted at our Facebook page, which is publicly visible and does not require a Facebook account to access.

regards,

goldpelican"
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Old 10-12-2012, 11:09 AM   #15
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Originally Posted by DoChenRollingBearing View Post:
Zero Hedge yesterday posted an item on Ireland, suggesting that we not forget about Ireland's debt, which IIRC (a big if) is even higher than Japan's debt / capita.

LOTS of countries are in trouble, like I have to say that here?!?!
hmmm, a good one - that guy Gurdgiev, is one of the non-mainstream (or shall I say anti-mainstream) economic professors, he's a lecturing economy at Trinity College in Dublin, and is overall sharp and no-BS type of lad! He writes pieces for some papers here, is/was on economic advisory boards of some good companies. He regularly debunks the "all-is-good" official BS, on a daily basis, and in hard numbers, quite often taking it's adversaries own statistics, and putting them in some REAL light/perspective.

I'd buy what he says in a second, most of the time.
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Old 10-23-2012, 06:09 AM   #16
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Quote :
Japan is poised to join the world's "currency wars" as it battles a triple crisis of crashing exports, recession and a suffocatingly-strong yen.
...
Yen strength is Japan's curse. It rises on safe-haven flows during global downturns, choking the economy. This stems from Japan's bitter-sweet role as top creditor with $3 trillion of net assets.

Hans Redeker from Morgan Stanley says this pattern may soon change as political upheaval in Tokyo and surging public debt of 245pc of GDP usher in an era of devaluation.

The Liberal Democratic Party (LDP) -- likely to win the Diet vote expected in December -- has written into its manifesto that the Bank of Japan should switch to a inflation and currency target. Pressure is growing for quantitative easing on a much greater scale to break out of the deflationary trap.

Mr Redeker expects the yen to weaken from 79 to 84 by Christmas, reaching 90 next year. "We think Japan will no longer be able to fund government debt (JGBs) from domestic investors as soon as 2015. They will have to print money instead. They can't afford to let bond yields rise because JGBs already make up 25pc of bank balance sheets. A rise in yields would set off a crisis."

Mr Redeker said the yen has been kept strong by Japanese insurers and pension funds hedging their $1.8 trillion holdings of foreign bonds with currency swaps. They are now fully hedged. This pillar of support has been knocked away.
...
More: http://www.telegraph.co.uk/finance/f...rts-slump.html

Quote :
Almost exactly a month ago, the BOJ surprised most analysts with an unexpected increase in its asset purchase agreement by JPY10 trillion bringing the total to JPY80 trillion. There was one small problem though: the entire impact of the additional easing fizzled in under half a day, or 9 hours to be precise. This was, as Art Cashin summarized the following day, Japan's failed QE 8. It is now a month later, and with nothing changed in the global race to debase status quo, the time has come for the BOJ to attempt QE 9. Or that's the case at least according to the toothless Japanese government, which has formally demanded that Shirakawa do a nine-peat of what has been a flawed policy response for over 30 years now, this time with another JPY 20 trillion, or double the last month's intervention. Because according to Japanese Senkei, it is now Japan's turn to pull a Chuck Schumer and demand even mor-er eternity-er QE out of monetary authority of the endlessly deflating country. In reverting to the Moore's law of failed monetarism, we expect that a QE 9 out of Japan will have the same halflife as QE 8, if indeed the program size is double the last. At which point it will again fizzle.

From Senkei via Bloomberg:

•Govt. is asking Bank of Japan to increase its asset-purchase program by 20t yen, Sankei reports, citing an unnamed government official.
•Program would be increased to 100t yen from current 80t yen: Sankei
•Increased fund likely to be used to purchase long-term JGBs, ETFs and J-Reits: Sankei
•BOJ is expected to lower economic growth, inflation forecasts in an economic report due Oct. 30: Sankei
...
More: http://www.zerohedge.com/news/2012-1...er-failed-qe-8
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Old 10-31-2012, 01:21 PM   #17
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Quote :
The weakening Japanese economy and concerns that the country is heading towards deflation led the Bank of Japan to announce further monetary easing measures yesterday. This is the second month in a row that the BoJ has unveiled new money printing measures, an unusual step. Its asset purchases are increasing by Y11 trillion ($138bn) to a total of Y91tn.

Ironically, what ZeroHedge calls “QE9” from the BoJ actually led to a 50-pip drop in the USDJPY – not exactly the result that the Japanese were after. USDJPY is currently trading around where it was at the end of last week. A Nomura source was quoted saying that Y10tn was the minimum market expectation: “the failure to reach 15 trillion yen is very disappointing for markets.” A perfect example of how equity markets are becoming addicted to central bank largesse, and how such interventions are subject to the law of diminishing returns. Such programmes need to get bigger and bigger if they are to succeed in forcing asset prices higher. The BoJ is learning this lesson the hard way.
...
http://www.goldmoney.com/gold-resear...s-markets.html
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Old 11-01-2012, 10:25 AM   #18
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wow no currency will be worth anything soon. Good thing we are stackers. Get as much as you can hold. It WILL be worth it. The entire world monetary system will collapse in on its self.
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Old 12-05-2012, 09:37 AM   #19
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Quote :
The Australian central bank cut its benchmark interest rate to a record-matching low level Tuesday, stepping up efforts to safeguard one of the most resilient developed economies from the risk of recession as a mining boom peaks.

The Reserve Bank of Australia, or R.B.A., cut its main cash rate 0.25 percentage point to 3 percent after its monthly policy meeting, adding to a rate reduction cycle that began in May and matching the lows hit during the darkest days of the 2008 global financial crisis.
...
http://www.nytimes.com/2012/12/05/bu...rest-rate.html
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Old 01-18-2013, 07:19 AM   #20
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Looks like Japan is going to follow the Bernanke plan:
Quote :
The Bank of Japan will consider making an open-ended commitment next week to buy government bonds and other assets until 2 percent inflation is in sight and the economy is on a more solid footing, according to sources familiar with its thinking.

The central bank will also consider scrapping interest it pays on banks' reserves, the sources added.

Faced with relentless pressure from Prime Minister Shinzo Abe to do more to pull Japan out of deflation, the BOJ is expected to double its inflation target and possibly boost its long-running asset-buying scheme at a two-day policy review that ends on Tuesday.
...
More: http://www.reuters.com/article/2013/...90H02720130118

The open ended QE is one thing, but scrapping interest paid on reserves is going to force banks to move their reserves elsewhere (into the economy). I understand that they want to increase the velocity of money and stimulate inflation, but this seems like playing with fire to me.
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