The BoJ Jumps The Monetary Shark – Now The Machines, Madmen And Morons Are Raging

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Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

Submitted by David Stockman via Contra Corner blog,

This is just plain sick. Hardly a day after the greatest central bank fraudster of all time, Maestro Greenspan, confessed that QE has not helped the main street economy and jobs, the lunatics at the BOJ flat-out jumped the monetary shark. Even then, the madman Kuroda pulled off his incendiary maneuver by a bare 5-4 vote. Apparently the dissenters – Messrs. Morimoto, Ishida, Sato and Kiuchi – are only semi-mad.

Never mind that the BOJ will now escalate its bond purchase rate to $750 billion per year – a figure so astonishingly large that it would amount to nearly $3 trillion per year if applied to a US scale GDP. And that comes on top of a central bank balance sheet which had previously exploded to nearly 50% of Japan’s national income or more than double the already mind-boggling US ratio of 25%.

In fact, this was just the beginning of a Ponzi scheme so vast that in a matter of seconds its ignited the Japanese stock averages by 5%. And here’s the reason: Japan Inc. is fixing to inject a massive bid into the stock market based on a monumental emission of central bank credit created out of thin air. So doing, it has generated the greatest front-running frenzy ever recorded.

The scheme is so insane that the surge of markets around the world in response to the BOJ’s announcement is proof positive that the mother of all central bank bubbles now envelopes the entire globe. Specifically, in order to go on a stock buying spree, Japan’s state pension fund (the GPIF) intends to dump massive amounts of Japanese government bonds (JCB’s). This will enable it to reduce its government bond holding – built up over decades – from about 60% to only 35% of its portfolio.

Needless to say, in an even quasi-honest capital market, the GPIF’s announced plan would unleash a relentless wave of selling and price decline. Yet, instead, the Japanese bond market soared on this dumping announcement because the JCBs are intended to tumble right into the maws of the BOJ’s endless bid. Charles Ponzi would have been truly envious!

Accordingly, the 10-year JGB is now trading at a microscopic 43 bps and the 5-year at a hardly recordable 11 bps. So, say again. The purpose of all this massive money printing is to drive the inflation rate to 2%. Nevertheless, Japanese government debt is heading deeper into the land of negative real returns because there are no rational buyers left in the market – just the BOJ and some robots trading for a few bps of spread on the carry.

Whether it attains its 2% inflation target or not, its is blindingly evident that the BOJ has destroyed every last vestige of honest price discovery in Japan’s vast bond market. Notwithstanding the massive hype of Abenomics, Japan’s real GDP is lower than it was in early 2013, while its trade accounts have continued to deteriorate and real wages have headed sharply south.

So there is no recovery whatsoever—-not even the faintest prospect that Japan can grow out if its massive debts. The latter now stands at a staggering 250% of GDP on the government account and upwards of 600% of GDP when the debts of business, households and the financial sectors are included. And on top of that there is Japan’s inexorable demographic bust—–a force which will shrink the labor force and squeeze even further its tepid growth of output as far as the eye can see.

Stated differently, Japan is an old age colony which is heading for bankruptcy. It has virtually no prospect for measurable economic growth and a virtual certainty that taxes will keep rising —since notwithstanding the much lamented but unavoidable consumption tax increase last spring it is still borrowing 40 cents on every dollar it spends.

So 5-year JGBs yielding just 11 bps are an insult to rationality everywhere, and a warning that Japan’s financial system is a disaster waiting to happen. But even that is not the end of it. Having slashed its historic holdings of JCBs, the GPIF will now double it allocation to equities, raising its investment in domestic and international stocks to 24% each.

Stated differently, 50% of GPIF’s $1.8 trillion portfolio will flow into world stock markets.  On top of that—the BOJ will pile on too—-tripling its annual purchase of ETFs and other equity securities. This is surely madness, but the point of the whole enterprise explains why the world economy is in such extreme danger. A Japanese market watcher caught the essence of it in his observation about the madman who runs the bank of Japan,

Kuroda loves a surprise — Kuroda doesn’t care about common sense, all he cares about is meeting the price target,” said Naomi Muguruma, a Tokyo-based economist at Mitsubishi UFJ Morgan Stanley Securities Co., who correctly forecast more stimulus today.

That’s right. Its 2% on the CPI…..come hell or high water.  There is not a smidgeon of evidence that 2% inflation is any better for the real growth of enterprise, labor hours supplied and economic productivity than is 1% or 3%.  Its pure Keynesian mythology. Yet all the world’s central banks are beating a path toward the same mindless 2% inflation target that lies behind this morning’s outbreak of monetary madness in Japan.

Folks, look-out below.  As George W. Bush said in another context…..this sucker is going down!

Black Power

33 comments

Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

Guest Post by Fred Reed

 

A Done Deal

As I write America waits, again, to see whether blacks will riot, this time in Ferguson. Will they loot, burn, kill, and rape? The usual? The police in Ferguson prepare to protect stores from looters, as rioters seem to regard their insurrections as shopping opportunities. Will it come, we wonder tensely? Will the destruction get out of hand, spread to other cities?

It is curious that blacks, the least educated thirteen percent of the population, the least productive, most criminal, and most dependent on governmental charity, should dominate national politics. Yet they do. Virtually everything revolves around what blacks want, demand, do, or can’t do. Their power seems without limit.

Courses of instruction in the schools, academic rigor, codes of dress, rules regarding unceasing obscenity, all must be set to suit them, as must be examinations for promotion in fire departments, the military, and police forces. Blacks must be admitted to universities for which they are not remotely qualified, where departments of Black Studies must be established to please them. Corporate work forces, federal departments, and elite high-schools must be judged not on whether they perform their functions but on whether they have the right number of blacks.

Do laws requiring identification to vote threaten to end multiple voting? The laws must go. Do blacks not like Confederate flags? Adieu, flags. Does Huckleberry Finn go down the Mississippi with the Nigger Jim, or Conrad write The Nigger of the Narcissus? These must be banned or expurgated to please blacks who haven’t read them or, usually, heard of them. Do we want to prevent people coming from regions infested with Ebola from entering the United States? We cannot. It would offend blacks.

We must never, ever say or do anything that might upset them, as virtually everything does. It is positively astonishing. One expects the rich and smart to have disproportionate power. But America is dominated from the slums.

One might think that a single set of laws should apply to all citizens, and that things should be done without regard to race, creed, color, sex, or national origin, and that all should have the same rights and responsibilities. It is not so.

The dominance of the media by blacks is impressive. If a white shoots a black to defend himself, it becomes national news for weeks, or months, and riots follow, but when blacks engage in their unending racial attacks on whites, the media demurely look the other way. The attackers are never black. They are “teens.” Reporters who say otherwise are likely to be fired. In effect, the thirteen percent censor the national press.

Much of their mastery has become so deeply engrained as no longer to be noticed. There is the DC Bob. In the bars and restaurants of Washington, a man weary of an incompetent affirmative-action hire in his office will, before commenting to a friend, lean forward, lower his voice, and look furtively over both shoulders to see whether anyone might overhear: The DC Bob. People don’t even know that they are doing this.

Defensive behavior by whites has become nearly universal. A sort of Masonic recognition-ritual occurs among white people recently introduced in social gatherings. Is the other person, for want of better terms, a liberal or a realist? Dare one speak?  One of them will say something mildly skeptical about, say, Jesse Jackson. The other rolls his eyes in shared disgust. The secret handshake.  Or, if the listener is politically correct, the bait is not taken. In either case, blacks dominate political conversation.

So extreme is the power to control speech and even thought that politicians have to avoid mentioning watermelons, that neighborhoods of high crime must delicately be called “sketchy” instead of “black,” though all understand what is meant.

The avoidance of racial reference is not an even-handed if despotic attempt to oppose racism since, as we all know, blacks freely apply any derogatory wording they choose to whites. In short, they rule. Which is amazing.

The dominance extends to children. When in junior high one of my daughters brought home a science handout with common chemical terms badly misspelled. “Is your teacher black?” I said without thinking. “Daaaaaaady!” she said in anguish, having made the connection but knowing that she shouldn’t have. Blacks control what you can say to your own children in your own home. And of course if I had gone to the school and demanded that the teacher be fired, it would have been evidence of my depravity and probable KKK membership.

The word “unbelievable” has lost all force.  Things that ought to be unbelievable, and once were, have become routine.  Still, there it was: Don’t expect a junior-high teacher to have the level of literacy I had in the fourth grade. Instead, make it dangerous to notice her stupidity.

This is not new, and it hasn’t changed. In 1981, in a piece for Harper’s, I wrote:

“The bald, statistically verifiable truth is that the teachers’ colleges, probably on ideological grounds, have produced an incredible proportion of incompetent black teachers. Evidence of this appears periodically, as, for example, in the results of a competency test given to applicants for teaching positions in Pinellas County, Florida (which includes St. Petersburg and Clearwater), cited in Time, June 16, 1980. To pass this grueling examination, an applicant had to be able to read at the tenth-grade level and do arithmetic at the eighth-grade level. Though they all held B.A.’s, 25 percent of the whites and 79 percent of the blacks failed. Similar statistics exist for other places.”s

Nothing has changed.

Blacks now control the presidency and thus, most importantly, the Attorney Generalship. In this the staggering political power of blacks is most evident. Obama was elected because he was black: an equally unqualified and negligible white pol would have had no chance. He is now fiercely pushing the most profound transformation of America ever attempted, by opening the floodgates to immigration from the south. To effect this end he apparently will simply ignore Congress. The people will not be consulted.

It is hard to imagine why he does it except from racism, from a desire to get even with whites by enrolling their country in the Third World. A short-sighted policy, yes, since Hispanics do not like blacks and will soon be more powerful—but that will come a bit later.

Note that self-inflicted problems of blacks consume inordinate amounts of public and governmental attention, even though only blacks can solve them. I might say, “should solve them,” since they never have and we all know they won’t. Yet we hear about them endlessly.

Are blacks in Chicago killing each other in large numbers? The solution might be to stop doing it, might it not? While I do not wish these young dead, I can do nothing to stop them, and it is not my problem. Are black children growing up illiterate? This gives me no pleasure, and I have various reasons both selfish and moral to wish it were not so. But perhaps the solution is for their parents, or parent, to see that they do their homework, or even to teach them. I cannot do this for them, and it isn’t my problem.

Why do I have to hear, endlessly, about the “achievement gap”? Whether of genetic or cultural origin, it seems as immutable as Avogadro’s number, and I can do nothing about it.  I raise my children. They need to raise theirs.

They rule. It is astonishing.

WAR OF THE WORLDS

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Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

Demise of the Petrodollar

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Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

Demise of the Petrodollar

By Casey Research

Vladimir Putin is stripping America of its superpower status. But he’s not using bombs or tanks to do it. He plans to destroy the one thing that underpins demand for the dollar and Americans’ way of life: the petrodollar system. This was the secret pact Kissinger struck in the vast oil rich deserts of Saudi Arabia. America guaranteed to defend Saudi Arabia and the House of Saud in perpetuity if the Saudis would sell oil in dollars. But many countries resent this system, and their leading spokesman is Putin. There’s a new Colder War going on, and it’s threatening the only thing holding America at the top.

 

Before Putin makes another move, pick up a copy of The Colder War and learn why the stakes have never been higher and why we’ve never been more vulnerable. Because if the petrodollar dies, so does America as a superpower.

 

The article Demise of the Petrodollar was originally published at caseyresearch.com.

FRIDAY FAIL

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Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

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10 HOURS OF WALKING IN NYC AS A WOMAN

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Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

,

Cold Climate Disaster Coming Our Way

12 comments

Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

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Situation on the territory of Gabrovo Municipality seems to deteriorate with every passing hour: Mayor (ROUNDUP)

This is a serious warning: An early build-up of snow in the northern hemisphere suggests that governmental units, charities and families should be prepared for the possibility of extended periods of colder and/or snowier weather relative to average  this winter. This would especially be a factor in the mid-South where they are not used to getting much snow in the winter. Budgets are going to be busted with snow removal. Many families will struggle with increased heating bills.

We continue to have a huge build-up of snow in the northern areas of the Northern Hemisphere. From Canada across Siberia to northern Europe, snow has come significantly earlier than average.  There is a strong correlation between early snow cover in eastern Asia and cold/snowy winters in the eastern U.S. Air that sits over all that snow is going to be cold and getting colder as the sun continues to retreat to the south until we reach the Winter Solstice on Dec. 21.

In Great Brittan heavy and persistent snow, freezing gales and sub-zero temperatures threaten to grind the country to a standstill for up to FIVE MONTHS, horrified long-range weather forecasters have warned. The impending bout of extreme weather will come as a shock and forecasters have warned Britons should not to be lulled into a false sense of security by the recent mild conditions. January is currently showing signs of temperatures hitting “record-breaking” lows meaning parts of the country could see the mercury plunge to -27C (-17F).

The greatest human disaster of the last thousand years is upon us and governments are asleep at the helm. A train is barreling down the tracks headed right for the peoples of earth yet there are those who lie and say the train is moving away. As they cry about the heat, it is getting colder at a dangerous rate. The planet is losing heat even though things are heating up with volcanoes and earthquake activity.

Global cooling is hard reality, it is no one’s fantasy. It is not a computer model that creates mental fabrications and estimates of reality without touching on reality itself. Global cooling means cold and lots of it. That means lots more energy to keep warm if you live outside the tropics.

Look at the following video to get a peek at the speed of cooling that is going on. It will show you the northern ice pack; how fast it grew in a recent ten-day period. In the southern hemisphere, we just finished winter, and saw record sea ice form around Antarctica. I can feel that from here in the subtropics, for I live at the furthest point east in all of the Americas in Brazil. Looking down the globe from here it’s a straight ocean run to the ice pack ten thousand odd miles to the south.

Millions of us better start recalculating our lives. Certainly hundreds of towns and cities will have to recalculate their budgets for snow removal. Heating bills will have to be recalculated. Just imagine what will happen to many economies and the retail business if people cannot get out of their homes during the holidays.

It is understandable if it is hard to grasp the full danger here. First, the governments have everyone looking the other way so no one prepares. People in Bulgaria, as we shall see below, are already suffering from what I am talking about and it is still early fall.

Think of it this way to get your mind around it. A hurricane is headed directly toward you and it is going to be a whopper. First thing you do is run to the market and clear out the shelves, stocking up on everything you can think of in a hurry. No time to think because everyone else is running.

Now the size! This storm is going to hit the entire northern hemisphere at the same time starting now and building up and continuing for the next six months. In Bulgaria winter and unending snow of at least 40 hours duration is burying them right now taking their power as well. Even without record snow, record cold will be a storm on millions of lives.

Russia, China, Europe, Canada and the United States will be the worst hit. Crops have already been destroyed from early snow and cold. Do I have to put on a blue jacket and saddle up like Paul Revere yelling the cold is coming the cold is coming? Ebola will be the least of our problems.

I have been writing about global cooling for about seven years. It is that length of time at least since a long list of scientists have been warning us about what is going on. Obviously, we have not been listening and we have these loud obnoxious political sound machines out on all the streets blasting out warning of global warming.

Time Magazine and National Oceanic and Atmospheric Administration (NOAA) announced a week ago. “The earth “could be” heading for its warmest year on record. Last month was the warmest September in 135 years of record keeping, with the global average temperature 60.3 degrees Fahrenheit (15.72 degrees Celsius), the Associated Press reports. May, June and August were also record-breaking months. NOAA climate scientist Jessica Blunden told AP it was “pretty likely” that 2014 would be the hottest year since measurements began.

Hard science is staring us right in the face. The sun is in retreat and it does that from time to time without fail. We have had Ebola and war threaten us but now the concern is going to shift week by week to the cold, snow and ice. I would not want to be without a BioMat during a long cold winter. Only problem is they depend on electricity.

US having coldest year on record-2014

This image shows that US is having coldest year on record-2014 “The most widespread heat occurred in 1931, when more than 98% of stations were over 90 degrees.” The percentage of US HCN stations to reach 90 degrees was the smallest on record this year, with four of the five coolest years occurring above 350 PPM CO2.

Winter in Fall

Burgas and Gabrovo remain in distress

Gabrovo and Sevlievo declare emergency in Bulgaria because of extremely severe winter conditions at the end of October with two full months remaining before winter officially arrives. More than fifty villages have no electricity. All roads and passes in the region are blocked. The main roads in the country are closed, trains are stopped, and thousands of subscribers are without electricity. Heavy snow did not stop for ten hours, along with hurricane winds and freezing temperatures. 40 people, including 20 children, were stranded for four hours at the train station after trains stopped moving in the region. Authorities have mobilized all civil protection teams, fire and police, and 50 snowplows. However, their work is hampered by the columns of stranded cars.

The situation in Gabrovo Municipality seems to deteriorate with every passing hour after more than 35 hours of continuous snowfall. The heavy snowfall is cutting power in more and more settlements as their number by the moment is over 90. Three living districts in Gabrovo are also without electricity. Last time I checked it was 44 hours of continuous snow. The post-storm situation following this past week remains critical. Drinking water is unfit for human use due to turbidity of the local lake. About 50 villages and districts in the county town are still without electricity. The dire situation remains in force.

The amount of available grain will decline as temperatures get cooler. Even if you’re able to harvest it, if the wheat is covered with snow when you harvest it, once that snow melts and turns to water, the seeds become moldy. Russia has slashed its wheat crop forecast. Same conditions in the Ukraine – early snows damaged the corn. Sorghum, flax, millet, buckwheat, it doesn’t matter which grain you’re talking about, if it gets wet it’s unusable. As snows arrive earlier with a cooling phase on Earth, grain harvests and planting will be affected.

Even in Hawaii it is cold. Despite the volcanic action in Hawaii over the past few days, the islands of Mauna Loa and Mauna Kea experienced a rare and very early snowfall two weeks ago. While snowfall on the big island is nothing new, commonly seen on the mountains on Mauna Loa and Mauna Kea, seeing snow this early in the season on the mountains is somewhat rare. It is exceptionally cold for October in Hawaii.

Moreover, what do we have served up for weather these coming days in the United States from AccuWeather?

Depending on its path, the storm could dump major snowfall over part of New England and as far south as the mountains of northern Georgia, leaving fallen trees and downed power lines in its wake. “A shocking blast of cold air and the potential for snow will highlight the weather for millions in the Eastern states this Halloween into the first weekend of November, says accuweather.com.

“The highest elevations of West Virginia may receive between 1 and 2 feet of snow,” says AccuWeather Chief Meteorologist Elliot Abrams. Meanwhile, a different storm will dump rain on the Pacific coast as far south as Southern California, where snow levels could drop to 5,000 feet.

WHY IS HE LAUGHING LIKE A LUNATIC?

4 comments

Posted on 31st October 2014 by Administrator in Economy |Politics |Social Issues

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Japan has been in a two decade long recession. They have 50% more debt as a percentage of GDP than any developed country on earth. They have a rapidly aging population. They have no energy resources. But their central bank does have a printing press.

The master plan announced overnight by their Janet Yellen – Kuroda – is to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month. This means the BOJ will now soak up all of the 10 trillion yen in new bonds that the Ministry of Finance sells in the market each month. This is all being done to reduce the value of the Yen and create inflation.

The central bank is already the largest single holder of Japan’s bonds, and the scale of its buying could fuel concerns it is underwriting deficits of a nation with the heaviest debt burden. The BOJ could end up owning half of the JGB market by as early as in 2018. This is the act of a desperate crazy man. He has set in motion a series of events that will lead to the collapse of Japan. It will be a failed state. It will become a modern day Weimar Republic.

View image on Twitter

“Bank of Japan Gov Kuroda, laughing like a James Bond villain who knows it’s too late to stop his plan from unfolding.” – Patrick Chovanec

Kuroda is an evil genius. He has single-handedly driven the Japanese stock market up 1,000 points in 7 hours and ignited stock markets around the world. The world is saved. He has proven that the world can be saved by printing trillions in new fiat currency and using it to buy stocks and bonds. Why didn’t we think of that? What could possibly go wrong?

 

I was reminded of another chart I once saw. Those Germans were in a bit of a pickle after World War I. Their central bank also provoked a stock market rally with the same master plan.

I’m sure the Japanese will successfully save their economy by printing yen at hyper-speed and using it to buy their ever increasing amount of public debt and as much stock as they can get their wily little hands on. Hyperinflation is so old school. No chance of it happening in the land of the setting sun. Right?