I’ve just wrapped up a long trip to Japan. And I’ve taken away one lesson from all of my conversations, speeches and research: The rise of nationalism in the U.S. will cause massive shifts in global trade alliances.
One of the main beneficiaries will be Japan. Now, Japan might not be on your radar, day-to-day, but it’s about to play a very important role in the world of Donald Trump.
Here’s what I mean… Continue reading
Banks are in over their heads in trouble. Central banks are over their heads in trouble as well. The only thing left to bail them all out would be the IMF — which is within the realm of possibility as we enter a harsh downturn.
Sentiment at IMF annual meeting sours on Fed, BOJ, ECB
The global financial elite has soured on global central bank policy, believing that it’s now counterproductive, doing more harm than good.
That was the message on the sidelines of the International Monetary Fund’s annual meeting in Washington, where in informal survey of more than 100 bankers found more than 70% saying monetary policy is now part of the problem instead of a solution. Continue reading
Former Japanese Economy Minister Heizo Takenaka said on Wednesday the Bank of Japan will lower its minus 0.1 percent interest rate further to achieve its 2 percent inflation target.
…
(TRUNEWS Vero Beach, FL) – Takenaka stressed that “core-core inflation”, which excludes food and energy prices, rose around 1 percent last year, reversing the 1 percent decline seen before BOJ Governor Haruhiko Kuroda took the post early 2013.
“I think BOJ Governor Kuroda has been doing well, although there is strong criticism.” Continue reading
If you don’t believe today’s infiltrated and corrupted America would wage economic warfare on its “ally”, Great Britain, think again. It already happened. You just missed the boat:
S&P cuts UK credit rating on Brexit fears
In the US Donald Trump has won the Republican presidential nomination. However, Republican convention delegates are plotting to deny Trump the nomination that the people have voted him. The Republican political establishment is showing an unwillingness to accept democratic outcomes.
The people chose, but their choice is unacceptable to the establishment which intends to substitute its choice for the people’s choice. Continue reading
Recently, I told you I was working on a special world currency report, with profit recommendations for a large basket of currencies.
…
The simplest way to do this is to start with the Big Five. These major currencies serve as the “drivers” for the minor ones. In my upcoming Part 2, I’ll tell you which of the minor currencies (like the Aussie dollar or the Swiss franc) are tied to which of the major ones, how that impacts their direction, and how you can profit.
Right now, we’ll start with profit recommendations for the five major currencies that drive all the rest. Continue reading
Time for a Plan (Perpetual) B, says Jefferies.
The Bank of Japan is running out of government bonds to buy.
The central bank’s would-be counterparties have become increasingly unwilling to sell the debt that monetary policymakers have pledged to buy, and the most recently issued 30-year Japanese bond didn’t record a single trade during a session last week as existing owners opted to hoard their holdings.
The central bank in the land of the rising
pricessun has set a target of 80 trillion yen ($733 billion) in government bond purchases per year in its continued attempts to slay deflation, an amount that’s more than double the pace of new bond issuance planned by the Ministry of Finance and about 16 percent of gross domestic product. Continue reading
As it goes, the alleged Shanghai Accord was a side meeting of only a handful of economic policymakers (in Shanghai – hence the name) that took place concurrently with the G20 Summit on Feb. 26.Attendees of the clandestine powwow included U.S. Federal Reserve Chair Janet Yellen, U.S. Secretary of the Treasury Jack Lew, Christine Lagarde from the IMF, Mario Draghi from the ECB, and central bank and finance ministry counterparts from China and Japan.
The chief reason for the Shanghai Accord was to allow these choice global policymakers a chance to plan the demise of the U.S. dollar.
That’s right, Yellen and Lew are in on it. Continue reading
U.S. markets logged their fifth straight week of gains last week, pushing the Dow and S&P 500 into positive territory for the first time in 2016. But despite those gains, the fears of a stock market crash are still very real.
In fact, Money Morning Capital Wave Strategist Shah Gilani says this rally reminds him of the one that preceded the 2008 stock market crash… Continue reading
Risks to global growth have increased since November and world leaders have little left in their fiscal and monetary arsenals to mitigate the threat, Moody’s has warned.
In its quarterly Global Macro Outlook 2016-17 report released Thursday, the ratings agency said that growth prospects were being hammered by China’s slowdown, a slump in commodity prices and tighter financing conditions in some emerging markets.
Japanese savers faced the shock of negative interest rates on their bank balances on Friday, as the Bank of Japan’s monetary policy committee took the unprecedented move to get the nation spending.
Five of the nine members of the BOJ Policy Board were in favor of the rate of minus 0.1 percent. The news followed a two-day meeting by the board. Continue reading
Central banks and respective governments are running out of magical tricks to pull out of the hat.
As already done in America [government takeover of the banking industry (government bailout) and health industry (“Obamacare”)], the next step is the nationalization of industries in other developed nations like we’re seeing now in Japan.
This paves the way for communist rule by stealth, but most people don’t see this so long as the shopping malls are remain open and they can still drink their beer while watching the NFL.
Despite its much longer experience with monetary stimulus, Japan’s economy remains listless and has continuously flirted with recession. In spite of this failure, Japanese leaders, especially Prime Minister Shinzo Abe (and his ally at the Bank of Japan (BoJ), Haruhiko Kuroda), have recently doubled down on all prior bets. This has meant that the Japanese stimulus is now taking on some ominous dimensions that have yet to be seen here in the U.S. In particular, the Bank of Japan is considering using its Quantitative Easing budget to buy large quantities of shares of publicly traded Japanese corporations.So for those who remain in doubt, Japan is telling us where this giant monetary experiment leads to: Debt, stagnation and nationalization of industry. This is not a destination that any of us, with the possible exception of Bernie Sanders, should be happy about.
The first round of interventions (2007-early 2009) was performed in the name of saving the system. The second round (2010-2012) was done because it was generally believed that the first round hadn’t completed the task of getting the world back to recovery.
However, from 2012 onward, everything changed. At that point the Central Banks went “all in” on the Keynesian lunacy that they’d been employing since 2008. We no longer had QE plans with definitive deadlines. Instead phrases like “open-ended” and doing “whatever it takes” began to emanate from Central Bankers’ mouths.
However, the insanity was in fact greater than this. It is one thing to bluff your way through the weakest recovery in 80+ years with empty promises; but it’s another thing entirely to roll the dice on your entire country’s solvency just to see what happens. Continue reading
The world authorities have run out of ammunition as rates remain stuck at zero. They have no margin for error as economy falters
The world economy is disturbingly close to stall speed. The United Nations has cut its global growth forecast for this year to 2.8pc, the latest of the multinational bodies to retreat.
We are not yet in the danger zone but this pace is only slightly above the 2.5pc rate that used to be regarded as a recession for the international system as a whole.
It leaves a thin safety buffer against any economic shock – most potently if China abandons its crawling dollar peg and resorts to ‘beggar-thy-neighbour’ policies, transmitting a further deflationary shock across the global economy.
HSBC chief economist Stephen King is already thinking about the next recession.
In a note to clients Wednesday, he warns: “The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers.” Continue reading
Earlier this month, the BoJ surveyed 40 dealers and discovered something shocking: buying the entirety of JGB gross issuance has had a rather dramatic effect on liquidity. In fact, two thirds of the firms who participated reported having “some or a lot” of problems and described bid-asks as “not very tight.” Today, an internal report from the central bank indicates officials are slowly coming to accept the fact that their actions have consequences although as you can see from the following, the fact that the BoJ is literally buying all of the bonds is still low on the list of factors the central bank figures might be negatively affecting liquidity… Continue reading
Global Geopolitics 