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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Sun Mar 27, 2016 11:23 pm 
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James Rickards: Author of "Currency Wars", Lawyer and Economist / Tres Knippa: Owner Principal of Bandon River Capital in Dallas, Texas



Japanese Policy Failure Means Disaster For Us All - -> http://www.mauldineconomics.com/outside ... for-us-all

Quote:
This week’s Outside the Box is a little bit different. I’m going to start with a selection from Mohamed El-Erian’s latest note. Mohamed himself is soft-spoken and calm, and I tell you that because the piece that follows is as close to capitals, underlining, and bolding with lots of exclamation points as Mohamed can get. He continues to get more concerned about the direction of central bank policy around the world and its unknown and unintended potential consequences. I will just cut and paste part of Mohamed’s essay into this introduction.

I want to follow up with a presentation by Kevin Wilson at Blue Water Capital on Japan. Basically, this piece illustrates the potential problems created by the current philosophical direction that the Bank of Japan is taking in their country. Essentially, Kevin is talking about the policy failure of Abenomics and the unintended consequences of negative interest rate policies (NIRP). A major economic disruption in Japan would have significant effects on the global economy. His summary sentence?

Given Japan's massive debt and demographic headwinds, the oncoming recession may trigger an endgame that would involve a possible depression and eventual default and devaluation.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Mon Mar 28, 2016 12:13 am 
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BoyRacer wrote:
Given Japan's massive debt and demographic headwinds, the oncoming recession may trigger an endgame that would involve a possible depression and eventual default and devaluation.

there is more



hahaha!
Japan default on Yen denominated debts :lol:
they print them..... duh.....

limit on yen "debt" is inflation; i.e. deflation of the currency.....
considering currency has strengthened this year that is more balderdash

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Mon Mar 28, 2016 9:42 am 
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Milk distribution becomes focus in Japan's butter shortage - -> http://asia.nikkei.com/Politics-Economy ... r-shortage

Toyota: Japan production to stop for week due to steel shortage - -> http://www.businessinsider.com/r-toyota ... 016-1?IR=T

Japan's Tourism Boom Is Generating Demand in Unlikely Places - -> http://www.bloomberg.com/news/articles/ ... ely-places

Quote:
Japan's tourism boom created a shortage of hotels rooms and made the nation the fastest-growing market for Airbnb.

there is more


French innkeepers share ‘minpaku’ woes with Japan hoteliers - -> http://www.japantimes.co.jp/news/2016/0 ... hoteliers/

Quote:
The Japan National Tourism Organization says a record 19.73 million tourists visited Japan in 2015, up 47.1 percent from 2014. The government is shooting for 20 million a year by 2020, when Tokyo will host the Olympics Games.
Under the Hotel Business Law, the use of private homes as tourist accommodations is illegal without a hotel license outside the government’s designated special economic zones.

there is more


Low wages at the heart of foreign labor shortage woes - -> http://www.japantimes.co.jp/news/2016/0 ... tage-woes/

Japan’s elderly turn to life of crime to ease cost of living - -> http://www.cnbc.com/2016/03/27/japans-e ... iving.html

Surge in safe sales, ¥10,000 notes reflects sagging faith in economy - -> http://www.japantimes.co.jp/news/2016/0 ... h-economy/

Image


Let's see, the people increasingly can't afford to buy butter and eggs and the conglomerates can't buy steel due to a combination of bureaucracy and reduced purchasing power. They can't keep their money in the bank because they are charged for it and with declining purchasing power of the yen they must store more and more large denomination notes to meet their running costs, but on the flip side their tourist industry is booming (at least until the Japanese bureaucracy stifles it) because foreigners have greater purchasing power and their government has discovered the secret to eternal monetary happiness by having the central bank buy it's bonds in it's own currency because "they can't default". Meanwhile their companies move production offshore where they can afford to buy raw materials and have to import the expensive finished product to their home market where less Japanese consumers can't afford to buy (+ new sales tax). (hey, the balance of trade looks good again), so they convert their foreign earnings to Yen and it makes their profits look good on paper so they goose the Nikkei index creating another asset bubble in the process.


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Mon Mar 28, 2016 11:55 am 
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Shamelessly stolen from another forum.
Quote:
http://www.cnbc.com/2016/03/27/japans-elderly-turn-to-life-of-crime-to-ease-cost-of-living.html
Quote:
Japan’s elderly turn to life of crime to ease cost of living

What could be sadder than this? Apparently a large (and growing) percentage of the Japanese elderly can't get by on their state pensions, so they're turning to a life of crime (like shoplifting), since in jail, they get their basic needs met, which apparently their state incomes don't.
Quote:
Japan's prison system is being driven to budgetary crisis by demographics, a welfare shortfall and a new, pernicious breed of villain: the recidivist retiree. And the silver-haired crooks, say academics, are desperate to be behind bars.

Crime figures show that about 35 per cent of shoplifting offences are committed by people over 60. Within that age bracket, 40 per cent of repeat offenders have committed the same crime more than six times.

Of course if this bankrupts the country, that doesn't exactly help anybody.
Quote:
There is good reason, concludes a report, to suspect that the shoplifting crime wave in particular represents an attempt by those convicted to end up in prison — an institution that offers free food, accommodation and healthcare.

...

The geriatric crime wave is accelerating, and analysts note that the Japanese prison system — newly expanded and at about 70 per cent occupancy — is being prepared for decades of increases. Between 1991 and 2013, the latest year for which the Ministry of Justice publishes figures, the number of elderly inmates in jail for repeating the same offence six times has climbed 460 per cent.

The surging rates of crime among the elderly disguise a darker trend than mere contempt for the law, say economists and criminologists. Retiree crime is rising more quickly than the general demographic ascent into old age that will put 40 per cent of the Japanese population over 65 by the year 2060.

(Blue font mine, for emphasis).

And for a country with HUGE debt and (as this article indicates) very bad demographics, it's probably difficult to do the right thing and make the basic pension a livable amount with reasonable free healthcare, on a needs-tested basis. But if they don't, the society will slowly disintegrate.

(The thing I don't understand though, is that supposedly the Japanese workers typically have very high savings rates. That seems to be confirmed here: http://www.tradingeconomics.com/japan/personal-savings If you click the "max" button, you see a long term gradually increasing very high savings rate, especially compared to countries like the US. Perhaps this is strongly biased toward the people with higher pay, so the people who don't save are really in trouble.)

This "silver haired crime wave" reminds me of the "Grey Dawn" episode of South Park. It also looks like doomer porn. Since Japan takes very few long term immigrants, their demographics problem is likely worse than the US's will be, but the first world in general is certainly headed that direction, with aging populations.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Sun Apr 24, 2016 3:10 pm 
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BOJ mulling negative rates on lending facilities for banks - Bloomberg - -> http://uk.reuters.com/article/uk-japan- ... KKCN0XJ0E3

Quote:
The Bank of Japan is considering applying negative rates to its lending programme for financial institutions, Bloomberg reported on its website Friday.
The BOJ may consider the new step if policymakers decide to lower further the negative 0.1 percent interest rate applied to some bank reserves parked with the central bank, Bloomberg said, citing several sources that it did not identify.
The central bank's next two-day policy review ends on April 28.
The BOJ has two lending facilities, one that offers banks zero-interest funding for loans to companies in high-growth industries and one that provides zero-interest long-term funds to banks that increase lending more generally.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Fri Apr 29, 2016 8:16 pm 
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The Bank of Japan becomes The Tokyo Whale - -> https://notayesmanseconomics.wordpress. ... kyo-whale/

Quote:
Today has already seen some eye-catching and thought-provoking news from the land of the rising sun or Nihon. Fortunately its new stealth fighter has not been seen taking off from its aircraft carriers excuse me helicopter destroyers merely from a runway. But we have seen news on a subject I analysed on the 19th of this month with this question.

How many central banks will turn into hedge funds?

As you will see there have been many other questions posed by what has now taken place in Japan so let’s crack on.

The Tokyo Whale

Those of you who recall what happened when The London Whale scandal emerged you may already be troubled by that name. Here is a Bloomberg reminder.

The trader known as the London Whale lost at least $6.2 billion for JPMorgan Chase & Co. in 2012……..More importantly, it raised two worrisome questions: What if the banks are still addicted to risk? And what if regulators haven’t gotten better at spotting that?

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Thu Aug 04, 2016 6:10 am 
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Bill Gross Says Record-Low Bond Yields ‘Aren’t Worth the Risk’ - -> http://www.bloomberg.com/news/articles/ ... al-selloff

Quote:
Investors are considering the outlook for global central-bank policies after the Bank of Japan made only minor adjustments at a meeting last week, boosting speculation it may be running out of options for further easing.

“Quantitative easing in Japan has proven not to have the effects that policy makers wanted it to have,” said Matthew Cairns, a strategist at Rabobank International in London. “Parallels are being made in Europe now: are we looking at a similar dynamic here as to what we’ve seen for decades in Japan?”

The spillover from Japan’s recent selloff into global bond markets comes after a rout last year that erased more than $750 billion in value from sovereign debt. The retreat began in Europe in April 2015, a month after the European Central Bank started its asset-purchase program, and spread around the world. German 10-year yields jumped from a then-record 0.049 percent that month to as high as 1.06 percent by mid-June.

there is more



10-year JGB notches worst losing streak since 2003 - -> https://next.ft.com/content/2bfdb4e0-d9 ... bd257e07c2


BOJ Is Running Out of Room to Buy Bonds Amid Stimulus: Chart - -> http://www.bloomberg.com/news/articles/ ... ulus-chart


Quote:
Through its unprecedented monetary-stimulus program, the Bank of Japan has acquired over a third of the nation’s total marketable government debt. By comparison, the Federal Reserve holds less than 20 percent of Treasuries, even after quantitative-easing efforts to support the economy, research by BMO Capital Markets pointed out Monday. The BOJ’s swollen coffers highlight the challenge for the world’s third-largest economy: There’s diminishing scope for the central bank to keep buying bonds, according to BMO.



See not a problem they owe it to themselves . . .. :lol:



Rout Sends Every Japanese Company Bond Sold in July Under Water - -> http://www.bloomberg.com/news/articles/ ... nder-water


Japan Pension Whale’s $52 Billion Loss Tied to Passive Ways - -> http://www.bloomberg.com/news/articles/ ... ssive-ways

Quote:
Friday was a big day for the world’s largest pension fund, which posted its worst annual loss since the financial crisis and disclosed individual equity holdings for the first time. The two may be connected.
The list of domestic shares owned by Japan’s $1.3 trillion Government Pension Investment Fund hews closely to the benchmark Topix index, which isn’t that surprising for a fund where almost 80 percent of investments are passive. But it means that in market downturns like in the past year, GPIF will struggle to increase assets.




'I Can't Rely on the Country': Why Japan Is Turning to Riskier DIY Pensions - -> http://fortune.com/2016/07/20/i-cant-re ... -pensions/

Japan’s Public Pension Fund to Launch Forum With Major Japanese Companies - -> http://www.wsj.com/articles/japans-publ ... 1469645337


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Mon Aug 15, 2016 11:55 am 
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Quote:
The Bank of Japan is on a rampage buying everything in sight, from stocks to bonds.
It’s on course to becoming the largest shareholder of 55 companies by the end of the year.


Image

http://monetarywatch.com/2016/08/bank-japan-will-largest-shareholder-55-companies-end-year/?doing_wp_cron=1471231481.8594629764556884765625


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Mon Aug 15, 2016 12:23 pm 
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mr_anderson wrote:
Quote:
The Bank of Japan is on a rampage buying everything in sight, from stocks to bonds.
It’s on course to becoming the largest shareholder of 55 companies by the end of the year.


Image

http://monetarywatch.com/2016/08/bank-japan-will-largest-shareholder-55-companies-end-year/?doing_wp_cron=1471231481.8594629764556884765625


It doesn't look to me though, that the proportion in monetary terms compared to the rest of the market has increased.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Aug 16, 2016 6:35 am 
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mr_anderson wrote:
Quote:
The Bank of Japan is on a rampage buying everything in sight, from stocks to bonds.
It’s on course to becoming the largest shareholder of 55 companies by the end of the year.



Japan will be the first country owned by its central bank. Once one entity owns everything there is no more market, no price discovery, no knowledge and no coordination - It's called socialism.


Mountain Day becomes Japan's newest public holiday - -> http://www.bbc.com/news/world-asia-37030868

Quote:
The Japan Times suggests the new holiday will be responsible for a possible extra 820bn yen ($8bn; £6bn) in spending, including a jump in sales of camping gear.

Any effect on the birth rate is less clear, though families are probably grateful for more time together.



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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Aug 16, 2016 9:19 am 
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BoyRacer wrote:
mr_anderson wrote:
Quote:
The Bank of Japan is on a rampage buying everything in sight, from stocks to bonds.
It’s on course to becoming the largest shareholder of 55 companies by the end of the year.



Japan will be the first country owned by its central bank. Once one entity owns everything there is no more market, no price discovery, no knowledge and no coordination - It's called socialism.


Mountain Day becomes Japan's newest public holiday - -> http://www.bbc.com/news/world-asia-37030868

Quote:
The Japan Times suggests the new holiday will be responsible for a possible extra 820bn yen ($8bn; £6bn) in spending, including a jump in sales of camping gear.

Any effect on the birth rate is less clear, though families are probably grateful for more time together.



They have 16 public holidays a year now!


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Aug 16, 2016 9:44 am 
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TheJackal wrote:

They have 16 public holidays a year now!


I've often thought the first Monday of every month should be a bank holiday (unless there were holidays in the previous month e.g. Christmas, Patrick's Day etc.)


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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Tue Aug 30, 2016 7:29 am 
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Japan to print additional ¥10,000 bills as more people stash their cash at home - -> http://www.japantimes.co.jp/news/2016/0 ... cash-home/
7 April 2016

Quote:
The Finance Ministry plans to increase the number of ¥10,000 bills in circulation, amid signs that more people are hoarding cash.
It will print 1.23 billion such notes in fiscal 2016, 180 million more than a year earlier. The number of ¥10,000 bills issued annually leveled off at around 1.05 billion in the fiscal years from 2011 to 2015.
Some financial market sources believe it is because more people are keeping their money at home rather than in banks, because interest rates on deposits have fallen to almost zero after the Bank of Japan introduced a negative interest rate in February.
The total amount of cash stashed at home is estimated to have surged by nearly ¥5 trillion to some ¥40 trillion in the past year, Hideo Kumano, chief economist at Dai-ichi Life Research Institute, said.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Fri Sep 02, 2016 8:08 am 
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Bank of Japan Has an 8.7 Trillion Yen Gap in Balance Sheet - -> http://www.bloomberg.com/news/articles/ ... et-problem

Quote:
There’s an 8.7 trillion yen ($84 billion) gap between the value of government bond holdings on the Bank of Japan’s balance sheet and their face value.

While not an immediate problem because the BOJ’s income can cover the losses, the widening gap raises questions about the sustainability of the central bank’s bond purchases, which Governor Haruhiko Kuroda has said could be expanded.

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 Post subject: Re: Japan: Bubble prophet fears new disaster
PostPosted: Wed Feb 01, 2017 10:11 pm 
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https://medium.com/@brendon_harre/what- ... .fnoo19nyo

Interesting stuff on Tokyo.

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