Bank of Japan Going Even Deeper Into Negative Rates

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

World Currency Profit Game Plan – Phase 1

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

QE’s Creeping Communism

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.

Continue reading

U.S. Returns Fire in Saudi Arabia’s Oil War

One day after Saudi Arabia declared war on U.S. oil producers by lowering prices in an attempt to dump cheap crude in the United States (US) market, the White House and private oil companies responded.  White House spokesman Josh Earnest said that the U.S. is monitoring the global oil supply and demand situation but has no comment on whether it might look at replenishing the Strategic Petroleum Reserve. Then, later in the day, the Wall Street Journal reported that BP is going to export ultra-light crude without the permission of the U.S. government in a move that not only starts to breakdown the US export ban, but also is a direct challenge to OPEC and other producers for market share.  Both of these developments temporarily gave support to the petroleum complex, but it still was not enough to overcome the perception of overwhelming supply and Bank of Japan Gov. Haruhiko Kuroda’ s prescription against the disease deflation. Continue reading

World risks deflationary shock as BRICS puncture credit bubbles

The world is one financial downturn, one major terrorist attack or one regional war away from collapse. 9/11 happened when the U.S. was on the brink of another economic bubble whereas the downturn of 2008 was a bubble created during the Clinton years in which it was only a matter of time before it popped.

As matters stand, the next recession will push the Western economic system over the edge into deflation

Half the world economy is one accident away from a deflation trap. The International Monetary Fund says the probability may now be as high as 20pc.

It is a remarkable state of affairs that the G2 monetary superpowers – the US and China – should both be tightening into such a 20pc risk, though no doubt they have concluded that asset bubbles are becoming an even bigger danger. Continue reading

World’s major central banks act with new boldness as economies falter

Central bankers, anywhere in the world, are a cautious lot. They prefer slow and steady over the dramatic gesture. And they rarely go public with criticisms of other central banks.

But the economic stagnation of the major developed nations has driven central banks in the United States, Japan, Britain and the European Union to take increasingly aggressive action. Because governments are not taking steps to revive economies, like increasing spending or cutting taxes, the traditional concern of central bankers that economic growth will cause too much inflation has been supplanted by the fear that growth is not fast enough to prevent deflation, or falling prices. Continue reading