Japan’s negative rates a looming headache for central bank

With subzero rates Japan appears to be spinning toward a significant economic disruption either sooner or later. The Land of the Rising Sun appears to be digging a very deep hole for itself.

Japan is still the world’s 3rd largest economy after the USA and China so upheaval in Japan means global upheaval.

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Faith in ‘healing’ central banks has faded says “central bank of central banks”

“We may not be seeing isolated bolts from the blue, but the signs of a gathering storm that has been building for a long time,” Borio said.

The above comes from the Bank of International Settlements in Switzerland.

In mid December we asked;

Are we feeling the first winds of the next large economic storm right now?

The winds sure did start to whip at the beginning of this year.

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Doomsday clock for global market crash strikes one minute to midnight as central banks lose control

Not the kind of economic boom the Keynesians were hoping for.

Look at it this way. If you are part of the vast, generally assetless or nearly assetless middle class you won’t have to watch the value of what you have decline. I guess that’s a good thing, sort of.

The world is slowing. China is in serious trouble and the ripples emanating from Beijing are becoming waves. The Keynesian experiment post-Crash is failing. (As the Austrian economists said it would.)

World markets are built right now on cotton candy and the rainbow dreams of central bankers.

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Is the stock market really “rigged?”

I remember sitting in my car in college listening to Howard Stern on the radio before class sometime in 2000. Howard and his crew were talking about the stock market which was roaring. The Tech Bubble was in full effect. The sky was the limit. If you weren’t in the market you were losing out. It was a similar vibe to the Housing Bubble which would emerge only a few years later.

Stern took a call from a listener.

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David Stockman: In Praise Of Price Discovery

I think that it’s funny that David Stockman, Ronald Reagan’s former budget chief, starts his column with this sentence:

“This morning’s market is more erratic than Claire Danes off her lithium.”

Seems a little gratuitously mean. Accurate (?) perhaps but mean. But that is one of the things we like about the guy. His acid.

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HSBC fears horrible end to Japan’s QE blitz as Abe wins landslide

The yen debasement bus rolls on. Has a new tank of gas too.

Oil sends a shudder through the world economy. Japan goes for broke (probably literally) with the Japanese citizenry on board. China fears being sucked into a debasement black hole. Europe clings. We watch.

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Japan Is Dying And We Still Don’t Get It?!

Japan, you gave us karate, Godzilla, walkmans (remember those?), sushi, Hello Kitty, and cars which didn’t fall apart. Though we fought you bitterly in World War II America came to love you more than any other country in the world with the exception of the United Kingdom (and maybe Australia, Canada doesn’t count). We hate to see you in your current straits. One, because we have a general affinity for the Land of the Rising Sun. But two, because we are riding the same bullet train here in the States,

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Did QE fail again in Japan? (Or do we just need a little more? Again.)

See, everything’s cool.

It has failed. It has failed for over 2 decades now.

But I attach an interesting debate featuring Peter Boockvar (in the Abenomics is a disaster camp) and David Zervos (in the Abenomics is proof that Keynesian huja buja works camp). They are diametrically opposed and it is fun to watch.

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World Economy Worst in Two Years, Europe Darkening, Deflation Lurking: Global Investor Poll

Indeed. Europe is pretty much in depression. So is Japan. (But so what’s new?) And by the way deflation is not necessarily a bad thing. We had mild price deflation through the most prosperous part of American history between the Civil War and the Fist World War. Things should naturally trend toward being less expensive as innovation increases, delivery streamlined, and competition increases.- Just had to get that in.

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