The Yen Goes Kamikaze 1

If You Thought Atomic Sushi, Hello Kitty and Pixelated Porn Were Some of Japan's Most Famous Exports, We Have News For You........Yeah.....You, Fag

1.  The Big News On Halloween

"We are in a critical moment in the effort to break free from the deflationary mindset."

-----Haruhiko Kuroda, Governor of the Bank of Japan quoted in "Japan summons bullish Halloween spirits", South China Morning Post, 1 November 2014

The Bank of Japan announced that every month, it intends to buy 8 Trillion to 10 Trillion Yen of Japanese Government Bonds.  Putting it another way, every month the Japanese Ministry of Finance sells 10 Trillion Yen worth of Bonds into the market. The Bank of Japan will (or probably will) now buy everything the Ministry of Finance issues.

2.   So....??

Big Deal...?  Yeah.....

• This is the Jap version of Quantitative Easing (which supposedly ended in the US just hours earlier);
• It's a massive monetization of debt;
• The BOJ is already the biggest holder of Japanese Government Bonds and its decision to buy up everything from now on is, as the guys from Adidas would say, going "all in";
• At this rate of Bonds buy-up, the BOJ would end up owning half the Japanese Bond market by 2018;
• Japan has been in a deflationary recession for over 25 years. This buy-up announcement is the most extreme step Japan has taken in order to induce inflation - at the magic (and utterly random) figure of 2%;
• On hearing the news, the Japanese state Pension Fund (JPIF) announced it would sell its bond holdings and go into the stock market in a massive buying spree.  With such an intended massive bond sell-off, one would assume the bond market would drop.  Instead it soared - and so did stock markets around the world seconds later;
• And who would buy the bonds that JPIF would sell...??  Why, the BOJ of course;

3.   And Your Point Would Be...??

• Quantitative Easing merely shifted from a US time zone to a Japanese time zone;
• Basically this is a monumental attempt to trigger (and theoretically sustain) a stock market surge based simply on Debt........The BOJ electronically creates currency out of thin air, buys up the bonds from the Ministry of Finance or JPIF.....and that currency magically ends up in the stock market, driving it up and creating "the Wealth Effect".  Everybody is supposed to feel richer and they'd go out and spend more, thereby reversing deflationary recession into inflationary boom;

4.   But.....

Sounds great huh....?  Except.....

As David Stockman pointed out in The BOJ Jumps The Monetary Shark - Now The Machines, Madmen and Morons Are Raging, October 31 2014:

• Japan's Trade Accounts have deteriorated (i.e. the country imports more than it exports);
• Real wages have declined;
• Japanese Government Debt is 250% of GDP;
• Total Japanese Debt (including household, business and financial sectors) is 600% of GDP;
• Japan's labour force is shrinking;
• It has a huge, rapidly ageing population (to which FuelMix would add, that the Japs don't allow foreigners to emigrate there);

UPLOADING MORE IN PART 2

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