But The Japanese Are Going To Have INFLATION! in [Market-Ticker]

Posted 2013-02-26 21:53
by Karl Denninger
in International

But The Japanese Are Going To Have INFLATION!

Oh really?

Then why did the JGB 10 year yield just hit a low not seen since 2003?

The market clearly does not believe that the pronouncements out of the government are anything more than a pant-load, or yields would be rising.

They're not.

Anyone for shooting some zombies? The Japanese government needs to do exactly that, but you know damn well they won't. What will happen instead is that something in a bad place will break, and then the recent tsunami will look like a girl scout picnic.

Discussion below (registration required to post)

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User Info	But The Japanese Are Going To Have INFLATION! in forum [Market-Ticker]
Hcashny Posts: 11 Incept: 2012-08-11 United States	What "Market?" If the BOJ (or Fed for that matter) is sitting on the bid with printed Yen($) then what kind of price signal are we getting? While central banks & govts CAN create inflation (see Chavez, Hugo), we all know that printing money to create nominal growth is not creating real growth or wealth (see Weimer, Germany). Can they do this forever? Yes and no- they can do it until the people realize how insidious this policy is with respect to the real economy that they participate in. But that might take a long time... 2013-02-26 22:17:11 Permalink
Harrisonact Posts: 1753 Incept: 2010-10-04 canada Online	Morons. ---------- bilge My playbook speaks espańol. Deal with it. Im too lazy to fix it. 2013-02-26 22:17:18 Permalink
Rvaspeculator Posts: 80 Incept: 2008-06-29	Karl, No matter how bad the inflation in Japan won't the yields stay at zero? Like the US bond market all of the Japanese bonds are bought by the government. The yen has depreciated 20% vs. the dollar in just the past 3 months or so yet I dont expect yields to ever get off zero until the whole thing goes KABOOM Maybe once the Dollar/Yen gets to 140 or so where it was a few times in the 90s we will finally see a spike in bond yields but by then it will be near the endgame. By then gas will be $15 a gallon in Japan. Gas is already up to $6.80 a gallon in Japan as the stagflation nation is raging much like it is here in the US. Once the yields in Japan spike its get in the bunker but I think what you could continue to see is horrid stagflation there where food and energy continue to skyrocket against a collapsing Yen with NO rise in bond yields as the government continues to buy every last bond. It works fine until it doesnt... That being said I do think it is hard to say there is no inflation in Japan at this time just as you couldn't say there is no inflation here in the U.S. 2013-02-26 22:25:47 Permalink
Genesis Posts: 130713 Incept: 2007-06-26	Well yeah.... and the Japanese have spent the last 20 years destroying their savings base, and now they're actually out. So how long do you think this takes before the people are utterly ***ed and have nothing to lose, at which point things get VERY dicey.... ---------- I don't care if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2013-02-26 22:28:12 Permalink
Chimichanga Posts: 526 Incept: 2011-03-16 Tokyo	Quote: before the people are utterly ***ed and have nothing to lose, at which point things get VERY dicey.... Sorry, but what might "dicey" include? (Not intentionally being obtuse, it's a genuine question.) 2013-02-26 22:36:25 Permalink*
Genesis Posts: 130713 Incept: 2007-06-26	When the people have nothing left to lose the constraints on rational human behavior go right out the window. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2013-02-26 22:37:07 Permalink
Mayorquimby Posts: 13909 Incept: 2008-09-18 The Archaic Past	I wouldn't even know where to begin to look for this but I would love to see some stats on Japanese historical pricing for food, housing etc. ---------- They who wish to hurt you, work within the law. - Morrissey Gold is theft. 2013-02-26 22:41:48 Permalink
Harrisonact Posts: 1753 Incept: 2010-10-04 canada Online	Simple answer to the 'dicey' conundrum. You either commit a crime or your kid starves. Guess which one will be chosen? ---------- bilge My playbook speaks espańol. Deal with it. Im too lazy to fix it. 2013-02-26 22:43:14 Permalink
Rvaspeculator Posts: 80 Incept: 2008-06-29	I think the Yen has to collapse to 140 or so before that happens... Once we get into uncharted territory for the currency is when it gets interesting. We went from 78 to 94 very quickly but still have a long way to go. Until then BOJ keeps buying all the bonds and the JGB bubble just keeps getting bigger and bigger. The article on Bloomberg right now says "Japans 10-year bonds rose, pushing down yields to the lowest since June 2003, on speculation Haruhiko Kuroda will become the next central bank governor and expand asset purchases." So it's just like the US where the large banks front run the Fed and then flip the same bonds back to them for better prices. Not an indicator of inflation or deflation, just the banks trying to make a quick buck on the CTRL-P button of the BOJ. 2013-02-26 22:46:54 Permalink
Chimichanga Posts: 526 Incept: 2011-03-16 Tokyo	Quote: When the people have nothing left to lose the constraints on rational human behavior go right out the window. For most of the planet I agree, but I don't think we do much of that over here. Maybe 1970 and 1971. An elderly taxi driver once told me that the difference between Japanese and most of the rest of the world is the Japanese people's ability to eat cabbage soup for long periods of time if necessary. 2013-02-26 22:47:36 Permalink
Genesis Posts: 130713 Incept: 2007-06-26	That worked real well in 1941. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2013-02-26 22:55:27 Permalink
Antone Posts: 7663 Incept: 2008-02-03 Seditionia, USSA	I find the "just shut up and take it - so what if we've been in a depression (economically and personally) for the last 20 years" attitude of the Japanese to be frustrating. Almost to the point that I will have very little pity when the damn finally breaks. (Though it's not like America is really any better, so therefore, I will unlikely have much pity when we finally hit the skids.) Edit: Quote: That worked real well in 1941. I was thinking exactly the same thing. ---------- As if anything has changed: Wir sind gefickt. Last modified: 2013-02-26 23:04:23 by antone 2013-02-26 23:03:35 Permalink
Ktrosper Posts: 1500 Incept: 2010-04-06 ft collins co	Gen wrote.. and the Japanese have spent the last 20 years destroying their savings base, and now they're actually out. How did they (I assume you mean the central bankers) do this? I know here, The Bernanke punishes savers with ZIRP and devaluation caused by QE... ---------- The unexamined life is not worth living.-Socrates The only stable state is the one in which all men are equal before the law.-Aristotle Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D 2013-02-26 23:11:31 Permalink
Genesis Posts: 130713 Incept: 2007-06-26	You run deficits, trash the purchasing power of the people, and effectively force them to spend down their savings. Then they're ***ed. ---------- I don't care if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2013-02-26 23:15:58 Permalink
Yazooflesh Posts: 4994 Incept: 2007-08-02	I knew he was going to say that! 2013-02-26 23:20:32 Permalink
Quik49 Posts: 3265 Incept: 2007-12-11 out yonderway	Tora tora tora.....was what I was thinking... ---------- UVA UVAM VIVENDO VARIA FIT 2013-02-26 23:22:38 From PDA Permalink
Quik49 Posts: 3265 Incept: 2007-12-11 out yonderway	Yup j6p can't print like benny and the jets....he has to used real money that's finite ---------- UVA UVAM VIVENDO VARIA FIT 2013-02-26 23:25:01 From PDA Permalink
Trades50 Posts: 4215 Incept: 2007-10-30 Land of Tax and Spend Online	The Japanese will just commit suicide if it gets bad enough or start a war with China. Not here. ---------- When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson 2013-02-27 00:08:40 Permalink
Fraudster Posts: 4173 Incept: 2011-05-10	KAMIKAZE! Almost literally. http://en.wikipedia.org/wiki/Kamikaze#De.... ---------- *"Let China sleep, for when she wakes, she will shake the world."* - Napoleon Bonaparte *"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]."* - Foundation & Empire by Isaac Asimov 2013-02-27 00:14:51 Permalink
End_the_bubbles Posts: 9519 Incept: 2009-03-25 The New 3rd World	Yes, no doubt Japan is **ed, However, there is a big ing difference between the Japanese and a very large contingent of SCAMerican "people" - namely, the Japanese people are honorable folks that won't be savages to each other when the collapse happens. They demonstrated that during the Tsunami. That won't happen in this hole country. Instead we'll just have a bunch of entitled ***s looting and shooting at each other, with another group of immoral losers filming this societal aberration with their "smart phones"...... The US is WAYYYY more ed in the ass than Japan! ---------- In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant's feet and rise in rebellion to overthrow their masters. Last modified: 2013-02-27 01:39:23 by end_the_bubbles Reason: *ing typos 2013-02-27 01:36:56 Permalink*
Duc888 Posts: 7368 Incept: 2008-11-06 CT, the UNconstitution State	Quote: Instead we'll just have a bunch of entitled *****s looting and shooting at each other, with another group of immoral losers filming this societal aberration with their "smart phones"...... If I just sit and watch the first group of entitled ***s off themselves for the LULZ but I do not film it am I still a immoral loser? I really do not want to partake in the coming festivities** but I wouldn't want to miss watching all the fun and games from the sidelines. ---------- ...burp Last modified: 2013-02-27 03:55:33 by duc888 2013-02-27 03:54:36 Permalink
Leicestersq Posts: 221 Incept: 2009-10-12 UK	What I dont understand is why the Japanese people are not selling their bonds, emptying their savings accounts, and getting into either overseas currency or hard assets, including gold, and stocks. Why bonds? Does their system force monies into that particular asset? 2013-02-27 06:51:28 Permalink
Vitchilo Posts: 4596 Incept: 2011-04-27 Online	Quote: When the people have nothing left to lose the constraints on rational human behavior go right out the window. Except in Japan where their culture has trained them to be quiet and take it up the arse without lube no matter what happens. You know, to save face. In 1941, it wasn't the people that lashed out, it was the government. It happened because the government had balls and was ``attacked`` by the US government so it was a ``personal offense`` to them... But right now, all that economic damage, they have done to themselves and can't blame anyone for it. So I think things will continue as they have been for the last 20 years... or maybe we'll see something in Japan that has never happened since 1877? A rebellion? And even back then, samurais rebelled... who's gonna revolt now... a bunch of unarmed old people? I don't have much faith in Japanese society revolting. It's not in their nature. I think most will just say FARK IT WE'RE LEAVING or will just stay put and survive. ---------- "Every normal man must be tempted at times to spit upon his hands, hoist the black flag, and begin slitting throats." -- H.L. Mencken 2013-02-27 07:00:34 Permalink
Chimichanga Posts: 526 Incept: 2011-03-16 Tokyo	Quote: What I dont understand is why the Japanese people are not selling their bonds, emptying their savings accounts, and getting into either overseas currency or hard assets, including gold, and stocks. Because the people who hold bonds are typically elderly and they remember very clearly the days of 200+ yen to the dollar. Historically, the yen essentially only goes up in value. Some peaks and valleys recently, but these are not people playing the markets, these are people who put their money somewhere and check on it once every 10 years or so. In 10 years, they are (historically) virtually assured to lose money hand over fist. Just look at the "January" column to see how it has changed since we got off the peg: http://en.wikipedia.org/wiki/Japanese_ye.... Over the past few years (before you all got into ZIRP) we could get a higher interest rate on a foreign currency deposit (let's say 3 or 4% p.a.) but lose out when we converted back to yen (2% fees to convert currencies, plus meanwhile the yen would invariably rise). Lots of people made that mistake once but will never do it again. Now, the interest rate is the same for all major currencies: https://www.citibank.co.jp/en/investment.... Quote: and stocks Ha ha ha ha ha. Good one there. From Wikipedia: Quote: The Nikkei average has deviated sharply from the textbook model of stock averages which grow at a steady exponential rate. The average hit its all-time high on December 29, 1989, during the peak of the Japanese asset price bubble, when it reached an intra-day high of 38,957.44 before closing at 38,915.87, having grown sixfold during the decade. Subsequently, it lost nearly all these gains, closing at 7,054.98 on March 10, 2009 81.9% below its peak twenty years earlier. I have to say though, the bubble was a total blast. 2013-02-27 07:12:07 Permalink

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