– The Only Two Charts You Need to Understand the S&P 500 (Washington’s Blog, Dec 6, 2014):
As long as corporations continue borrowing money to buy back their own stocks and the yen keeps dropping, the SPX will continue lofting higher.
…
Yen
How Japanese Hyperinflation Starts (In One Chart)
– How Japanese Hyperinflation Starts (In 1 Chart) (ZeroHedge, Oct 21, 2014):
The Japanese Yen’s real effective exchange rate (REER) has collapsed to the weakest since 1982, according to Mitsubishi UFJ Morgan Stanley Securities. Simply put, REER is a trade-weighted measure of Yen strength (or weakness) against, in this case, 59 trading partners; and as the nation posts an unprecedented 27th straight month of trade deficits [43rd straight month of Seasonally-adjusted trade deficits], Bloomberg reports MUFJ indicates “a structural shift” has taken place.
As a reminder, the Real Effective Exchange Rate (REER) is:
Gerald Celente: New World Disorder Smackdown – How We Take Back America (Video)
Added: Apr 25, 2014
Description:
Trends Guru and forecaster extraordinaire Gerald Celente joins Sheila Zilinsky the Weekend Vigilante on his plan for a one-two punch to the globalist agenda and we take back the greatest country in the world
Japanese Stocks In Freefall – TOPIX Plunges Almost 5% To 4-Month Lows; Nikkei Down 15% In 2014
– Japanese Stocks In Freefall – TOPIX Plunges Almost 5% To 4-Month Lows; Nikkei Down 15% In 2014 (ZeroHedge, Feb 3, 2014):
UPDATE: USDJPY has re-tumbled back below 101.00, recoupling with S&P 500 futures from the tried-and-failed attempt to ramp stocks overnight. It seems the short-JPY-driven carry traders have backed away from risk for now, no matter how much the BoJ primes the pump.
Nikkei futures are under 14,000 and down 15% from Dec 31st highs.
Despite the hope-driven exuberance exhibited immediately post the Abe/Kuroda show, the USDJPY-pumping stock-momentum fest has ended – abruptly. Japan’s Nikkei 225 has lost all its gains and is now trading below US day-session lows (3-month lows) but it is the broader TOPIX index (more akin to the S&P 500) that is collapsing. Down almost 5% on the day (its biggest drop since the May collapse), the TOPIX is at 4-month lows. The TOPIX Real Estate index just hit a bear-market – down 20% from Dec 31st highs. Japanese sell-side shops are in full panic desparation mode as “suggestions” that a sub-14,000 Nikkei will prompt an acceleration of Japan’s QQE money-printing idiocy. This is getting ugly fast.
Alarms Going Off As 102 Dollar-Yen Support Breached
– Alarms Going Off As 102 Dollar-Yen Support Breached (ZeroHedge, Feb 3, 2014)
Hedge Fund Manager Kyle Bass: ‘Japan Will Implode Under Weight Of Their Debt’ (Video)
– Kyle Bass: “Japan Will Implode Under Weight Of Their Debt” (ZeroHedge, April 4, 2013):
As the fast-money flabber-mouths stare admiringly at the rise in nominal prices of Japanese (and the rest of the world ex-China) stock prices amid soaring sales of wheelbarrows following Kuroda’s ‘shock-and-awe’ last night, it is Kyle Bass who brings these surrealists back to earth with some cold-hard-facting. Out of the gate Bass explains the massive significance of what the Japanese are embarking on, “they are essentially doubling the monetary base by the end of 2104.”
It is a “Giant Experiment,” he warns, but when you are backed into a corner and your debts are north of 20 times your government tax revenue, “you’re already insolvent.” Simply put, Bass says they have to do something and they have to something big because they are “about to implode under the weight of their debt.” For a sense of the scale of the BoJ’s ‘experimentation’, Bass sums it up perfectly (and concerningly), “the BoJ is monetizing at a rate around 75% of the Fed on an economy that is one-third the size of the US!”
What they are trying to do is devalue the currency to attempt to become more competitive while holding their rates market flat – the economic zealots running the world’s central banks believe they can live in that Nirvana – and Bass believes that is not the case, as they will lose control of rates, since leaving the zone of insolvency is impossible now. His advice, “if you’re Japanese, spend! or take it out of your country. If you’re not, borrow in JPY and invest in productive assets.” Do not be long JPY or Japanese assets as he concludes with the reality of Japan’s “hollowed out” manufacturing industry and why USDJPY is less important that KRWJPY.
Jim Rogers: ‘We’re Wiping Out The Savings Class Globally, To Terrible Consequence’ (Video)
FYI.
– Jim Rogers: We’re Wiping Out The Savings Class Globally, To Terrible Consequence (Peak Prosperity, March 9, 2013):
Jim Rogers decries the growing uncertainty and recklessness of global central planners as the world enters unchartered financial markets:
For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don’t know. It just depends on which one goes down the most and first, and they take turns. When one says a currency is going down, the question is against what? because they are all trying to debase themselves. It’s a peculiar time in world history.
Read moreJim Rogers: ‘We’re Wiping Out The Savings Class Globally, To Terrible Consequence’ (Video)
Japan: Presenting Shinzo Abe’s ‘Super-Secret’ Devaluation Plan – Double-Down
– Presenting Abe’s ‘Super-Secret’ Devaluation Plan – Double-Down (ZeroHedge, Dec 28, 2012):
Much has been made of newly appointed uber-easer Abe’s plans to weaken the JPY by any means possible. Since the global financial crisis began in early 2008, USDJPY has tracked remarkably closely with the ratio of Federal Reserve assets to Bank of Japan assets – as the currency wars escalated. Assuming the Fed proceeds with its planned QE3/4 $1tn expansion, then BoJ assets would need to expand by around JPY100tn to meet this target. The current BoJ holdings of JGBs just crossed JPY100tn – so this new printing is double the current holdings and considerably more than double the planned JPY44tn purchases for the year. Good luck with that given the expected JGB issuance this year is only around JPY44tn and good luck persuading anyone that the BoJ is not directly funding the government in the ultimate reacharound. As the Fed monetizes 1 year of Treasury issuance so the BoJ has to monetize over 2 years of JGB issuance – sustainable?
Read moreJapan: Presenting Shinzo Abe’s ‘Super-Secret’ Devaluation Plan – Double-Down
China And Japan Dropping Dollar Cross Rate System, Will Transact Directly
– China And Japan Dropping Dollar Cross Rate System, Will Transact Directly (ZeroHedge, May 26, 2012):
While various three letter economic schools of thought continue sprouting left and right, in an attempt to validate endless spending predicated on one simple thing: transitory reserve currency status, and we emphasize transitory, reality moves on, oblivious of what economic theoreticians believe it should be doing. As Yomiuri Shimbun reported last night, China and Japan are set to launch direct currency trading, bypassing the dollar, and the associated benefits and risks, entirely. “But how can that be?” dollar purists will scream. After all, when one bypasses the dollar, one commits blasphemy to a reserve currency. Somehow we think China gets that. From the AP: “Japan and China are expected to start direct trading of their currencies as early as June as part of efforts to boost bilateral trade and investment, according to reports. With the planned step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current “cross rate” system that involves the dollar in setting yen-yuan rates, Kyodo News said on Saturday.”
More specifics on how the world’s second and third largest economy will just say no to dollar hegemony:
The two governments are eyeing setting up markets in Tokyo and Shanghai, the Yomiuri Shimbun said.
The yen-yuan exchange system would help businesses in the world’s second- and third-largest economies reduce risks associated with exchange rate fluctuations in the dollar and cut transaction costs, Kyodo said.
It will be the first time that China has allowed a major currency except the dollar to directly trade with the yuan, Kyodo said.
As usual, why spend time commeting with words, when a simple chart will suffice.
The REAL STORY Your Governments, MSM And The Central Banksters Completely Forgot To Tell You About: ‘The Race To Debase In All Its Glory’ (Chart)
– The Race To Debase In All Its Glory (ZeroHedge, Feb. 19, 2012):
Lest anyone forget what the real story is, here is a reminder. Thank you neo-Keynesian economics for making a mockery of non-scientific notation.
US Dollar Tumbles To Record Low Against Swiss Franc, New Lows Against Yen
Just wait until (Black?) Monday!
– Dollar Tumbling To Record Low Against Swiss Franc, New Lows Against Yen (ZeroHedge, Aug 7, 2011)
For an early look at the risk aversion gripping the market look no further than the USDCHF and the USDJPY, the first of which just took out 0.75, and the second now almost at BOJ intervention levels. Ironically, since the math Ph.D.s have still not recalibrated their models, it is very likely that the collapse in the dollar will lead to an explosion in ES courtesy of the inverse correlation, which will once and for all confirm that global capital markets and now nothing but a robotic circus.
USDJPY:
USDCHF:
Cross currency:
The G7 Turns On Itself: Bank of Korea Sells Its Share Of Japan Rescue Dollars, Sends Greenback Plunging
Remember when the G7 stepped in to valiantly sell yen when the Japanese currency was threatening to take out all of Wall Street with its hundreds of billions in wrong way carry trades? Well, it seems that today’s bizarre sell off in the dollar was due to that particular plan crashing and burning, with Korea defecting from the pact first, and selling its $7 billion in USD acquired in the process of bailing out Japan. It seems it is fair game to buy the Yen once again. From a trading desk:
USD getting spanked today is Bank of Korea selling $7Bn USD it bought during the coordinated USDJPY intervention, and buying GBP and EUR with it. I can understand why they would get rid of the USD, but why buy GBP and EUR with it???? Either way, goes to show how useful it is to do an intervention, they drop the reserves 2 weeks after… we’ll be back to square 1 in no time if everybody follows suit!
Remember – he who defects first and all that jazz…
(and yes, if $7 billion can move the EURUSD by 180 pips, we dread to see what the actual carry unwind instead of just impairment would look like).
The Day The Yen Carry Trade Died
(Click on image to enlarge.)
While everyone is staring in disbelief at the USDJPY, the real carry action is in the high yielding-YEN pairs, i.e., the development, high growing countries. And it’s a massacre: ZARJPY, NZDJPY, AUDJPY – all are plunging far more than the USD. This is nothing short of a complete carry trade unwind.
The implications: the cheapest recurring source of funding for risk assets – the Yen carry trade, is over. Those who managed to sell early on are lucky. The rest will get such an onslaught of margin calls tomorrow they may need to access the discount window (if Primary Dealers and the luckier banks).
Many will be forced to sell assets to satisfy collateral requirements as ongoing sales of carry pairs push the Yen ever higher, and force ever more liquidity out of the market. And if the Yen carry trade is done, the question is when will the USD, which has also been a carry currency for some time, follow suit.
Emergency: Record Collapse: USDJPY Flash Crashes As All Support Taken Out – USDJPY Goes Bidless – Technical USDJPY Observations: ‘If The Down Move Continues, 71.70 Is Next’
Support broken as the dollar yen plunges to an all time record low. Everyone now watching the Nikkei to see if it opens. That the BOJ has not intervened yet is beyond ominous, and nothing short of a death sentence for the Yen carry traders.
One can only watch this devastation with horror. USDJPY drops to 76. Unbelievable. Many Wall Street FX desks are blowing up right at this moment.
Submitted by Tyler Durden on 03/16/2011 17:17 -0400
Source: ZeroHedge
– John Noyce Is First With Technical USDJPY Observations: “If The Down Move Continues, 71.70 Is Next” (ZeroHedge):
Goldman’s John Noyce is the first FX technician with a proposed take on tonight’s stunning developments. Keep in mind, he, like everyone else is in uncharted (pardon the pun) territory.
Quick JPY Charts – Wednesday 16th March 2011
There are two ways of arriving at a downside target of 77.75-77.56;
- An equal size pip drop from the June ’07 high to that from the August ’98 high to the November ’99 low would target 77.75
- The extension target of the triangle which formed from 1st November ’11 to 15th March comes in at 77.56
The market has been below this region intraday, but, the NY 5pm close was at 77.90 according to the EBS data we use. If we were able to stabilise around 77.75-77.56 you could argue that the last part of the drop was set in an extreme situation with poor liquidity etc. definitely something to watch closely. Not to say the call was for a move this sharp in the first place, but with the help of hindsight on two counts you could argue “target met”.
..If.. the down move does continue the next really clean level is the actual parallel channel support off the August ’98 high which comes in at 71.70 on the linear scale chart.
Japanese Investors To Dump Overseas Assets To Bring Their Money Home To Rebuild
Before:
– PIMCO Total Return, The World’s Largest Bond Fund, Dumps All US Government Debt Holdings
(Reuters) – Shaken by the prospect of nuclear meltdown after a devastating earthquake and tsunami, Japanese investors will dump overseas assets on Monday and bring their money home to help finance reconstruction.
Positioning for this could send the dollar plummeting versus the yen on Monday and lead to a sharp slide in Treasuries since U.S. government bonds are a favorite asset of Japanese investors, market analysts said.
Stocks also are likely to come under pressure.
Japanese insurers will probably sell some of their most liquid foreign assets such as U.S. Treasuries so they can respond to the worst disaster since World War Two.
Read moreJapanese Investors To Dump Overseas Assets To Bring Their Money Home To Rebuild
Standard & Poor’s Downgrades Japan’s Credit Rating On Debt Concerns, Yen Tumbles, Yields Rise
In other news:
– Forex traders send yen tumbling (Financial Times)
– Japan Yields Rise on S&P Downgrade (Wall Street Journal)
–Dollar Jumps Vs Yen After Japan’s Debt Rating Cut (ABC News)
–FOREX-Yen slides on S&P downgrade of Japan long-term debt (Reuters)
Standard & Poor’s on Thursday cut Japan’s credit rating for the first time since 2002, accusing the government of lacking a “coherent strategy” to ease the highest debt of any industrialised nation.
The US credit risk appraiser cut its rating on Japan’s long-term sovereign debt to “AA minus” from “AA”, saying that it expected the country’s groaning fiscal deficits to stay high in coming years.
It was the first downgrade of a G7 member since Italy in October 2006, and underlined mounting problems with national debts since the 2008 financial crisis. Four eurozone members including Spain suffered downgrades last year.
“The downgrade reflects our appraisal that Japan’s government debt ratios — already among the highest for rated sovereigns — will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s,” S&P said.
“The Democratic Party of Japan (DPJ)-led government lacks a coherent strategy to address these negative aspects of the country’s debt dynamics,” it said.
The Japanese currency tumbled following the announcement, with the dollar gaining by a more than a yen to 83.20 yen from around 82.12 in earlier trade, before recovering to around 82.76 to the dollar.
Japan Mulls Monetisation of Public Debt And Yen Devaluation By 30 Percent
Wake up Japan!
Japan’s ruling party has called for drastic monetary easing to devalue the yen by 30pc and halt the slide into deflation, putting it on a collision course with the Bank of Japan.
Lawmakers from the Democratic Party of Japan called for the exchange rate to be steered to ¥120 against the dollar, from around ¥90 currently. (Bloomberg)
A draft by 130 lawmakers from premier Yukio Hatoyama’s Democratic Party of Japan said the country needs a radical shift towards growth policies, calling for an inflation target above 2pc. The exchange rate should be steered to ¥120 against the dollar, from the current ¥90.
Shizuka Kamei, financial affairs minister, said the central bank must monetise government debt to support the market for state bonds and prevent deflation becoming deeply lodged in the economy.
The Bank of Japan’s governor, Masaaki Shirakawa, told lawmakers that it would illegal to fund state spending by printing money. “History has proven that central banks directly buying government securities caused severe inflation and dealt a blow to the economy. The BoJ is now providing adequate funds,” he said.
Read moreJapan Mulls Monetisation of Public Debt And Yen Devaluation By 30 Percent
Sumitomo Chief Strategist: US Dollar to Hit 50 Yen, Cease as Reserve Currency
The coming US dollar crisis will be created in order to push through with the New World Order:
– Global banking body may be needed – FSA:
“LONDON (Reuters) – A global body with legal powers may be needed over time to enforce the world’s new financial rules, the Financial Services Authority (FSA) said on Wednesday.”
“Formerly known as the Financial Stability Forum, the FSB was expanded in April to include central bankers and finance ministry and regulatory officials from all Group of 20 (G20) countries.”
‘Problem’: In this case the coming US dollar crisis.
‘Reaction’: In this case a public outcry for stability and security.
Always the ‘Solution’: The New World Order. In this case the ‘New World Financial Order’
1000 yen notes are arranged on top of U.S. one dollar notes in New York, in this file photo. Photographer: Andrew Harrer/Bloomberg
Oct. 15 (Bloomberg) — The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.’s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.
“The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger,” said Daisuke Uno at Sumitomo Mitsui, a unit of Japan’s third- biggest bank. “The dollar’s fall won’t stop until there’s a change to the global currency system.”
The dollar last week dropped to the lowest in almost a year against the yen as record U.S. government borrowings and interest rates near zero sapped demand for the U.S. currency. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, has fallen 15 percent from its peak this year to as low as 75.211 today, the lowest since August 2008.
The gauge is about five points away from its record low in March 2008, and the dollar is 2.5 percent away from a 14-year low against the yen.
“We can no longer stop the big wave of dollar weakness,” said Uno, who correctly predicted the dollar would fall under 100 yen and the Dow Jones Industrial Average would sink below 7,000 after the bankruptcy of Lehman Brothers Holdings Inc. last year. If the U.S. currency breaks through record levels, “there will be no downside limit, and even coordinated intervention won’t work,” he said.
Read moreSumitomo Chief Strategist: US Dollar to Hit 50 Yen, Cease as Reserve Currency
US Dollar Reaches Breaking Point as Central Banks Shift Reserves
A Euro note is arranged above U.S. bills for a photograph in New York in this file photo. Photographer: Daniel Acker/Bloomberg
Oct. 12 (Bloomberg) — Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.
Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase.
World leaders are acting on threats to dump the dollar while the Obama administration shows a willingness to tolerate a weaker currency in an effort to boost exports and the economy as long as it doesn’t drive away the nation’s creditors. The diversification signals that the currency won’t rebound anytime soon after losing 10.3 percent on a trade-weighted basis the past six months, the biggest drop since 1991.
“Global central banks are getting more serious about diversification, whereas in the past they used to just talk about it,” said Steven Englander, a former Federal Reserve researcher who is now the chief U.S. currency strategist at Barclays in New York. “It looks like they are really backing away from the dollar.”
Sliding Share
The dollar’s 37 percent share of new reserves fell from about a 63 percent average since 1999. Englander concluded in a report that the trend “accelerated” in the third quarter. He said in an interview that “for the next couple of months, the forces are still in place” for continued diversification.
Read moreUS Dollar Reaches Breaking Point as Central Banks Shift Reserves
Jim Rogers on Bloomberg: More bankruptcies to come (03/13/09)
March 13, 2009
Source: YouTube
Peter Schiff: US Dollar is on the verge of collapse; This is hyperinflation; This is Zimbabwe (12/17/2008)
Peter Schiff: “I am a 100% convinced that anybody who has their wealth in US Dollars will be just as broke as the people who had their money with Madoff.”
(All 6 parts are a must-see.)
Part 1 of 6
Source: YouTube