Note: (left) Here are the top 50 Bubbles over the past years.
Japan has proved without confusion that 0% is a permanent stuck position. The United States will repeat the path, but with a vast mudslide. Japan has had the advantage of a strong industrial base, a sizeable trade surplus, and no war budget. Thus it has been capable of funding much of its own deficits. It does possess a big debt burden. But the US has $1 of new debt for every $1 in government revenue. The US war budget is almost as large as its total revenue. The US depends upon foreign creditors, many of whom have been thoroughly alienated. Apart from the structural and foreign angles, the US is stuck with a 0% policy. The USFed has no Exit Strategy at their avail, precisely what the Jackass has stated for over a year. It cannot manage any change, as sharp knives, machetes, and guillotines await on the other side of the monetary doorway. The present 0% road to ruin is fixed, as the USFed cannot change course from it. This is simple to see, with eyes open and mind turning. That excludes the majority of US economists, whose eyes are transfixed on mindless measures like inflation expectations and whose mental gears stopped turning years ago. They are locked in the Keynesian aberrations within the paper money dungeon. They do not comprehend sound money. They do not comprehend legitimate income. They do not comprehend the importance of industry. They do not comprehend the lethal nature of debt burdens. They are fully committed to ruin. They do show signs recently of awakening to their helpless helm devoid of tools, even awakening to the systemic failure they have wrought.
The US debt is not the same as Japans .inflation will arrive quicker.
ReplyDeleteSince the government of Japan knuckled under the dollar hegemony dictate and revalued its currency in the “plaza accord” the once surging Japanese economy now barely treads water. The Japanese govt ,now has a large public debt, but this Japan treasury bills debt is nearly all held in the hands of the Japanese people themselves.
In this way the Japanese people subsidized the Japanese export industries.
Should the Japanese central bank now or eventually default it will only be the Japanese people that suffer. That is an internal thing.
Should the US inflate away the dollar value , or default that is a world event ,because
the US is in the opposite situation , it has used foreign credit supply to finance its imports. The US Treasuries however are about 50% in the hands of foreigners. Japan, China etc that now own the US Treasury Dept. ass.
So the Japanese were able to prop their economy for a couple of decades of money printing by selling their treasuries to their own people .
But , the Dept Peons of America cannot buy all the US Treasuries .
Already the US is faking the Treasury market by purchasing its own debts.
This turn to wild printing by the US threatens the value of other countries dollar savings
Foreign dollar investment and the puppet pricing of Oil in US dollars creates a world wide demand for dollars , propped up the dollar value and provided credit for the dollar hegemony Ponzi system .
The US has a bankers monopoly of printing dollars and exchanges its paper for real things ,the money comes back and it only has to pay low interest.
Countries like China have no internal need for dollars and re-circulate dollars back to the US in return for interest payments .
This is cheap vender financing the US can use to purchase say Chinese commodities.
The US is on fast track money printing to “stimulate” its economy . It has no savings to fall back on as currency reserves it is the worlds largest creditor after deficit spending for wars and to stimulate its military /industrial complex with “military keynesianism” .
Some of the dollars that might have been sent back to the US as in the past
are now being used to buy real assets in the world and to stimulate its own economy.
Thus ,this stimulation of the Chinese economy is not dependent on wild money /yuan printing ,they have US dollars they do not want to invest in the US now ,but they can spend them in the rest of the world .
But the failure to purchase American Mortgage and treasury bonds weakens the US dollar at a time of money printing when the US needs to sell vast amounts of treasury bills. So, worldwide Currency valuation wars are developing after the collapse of the US Ponzi economy.
The empty drum is making a lot of threatening noises about sanctions at China ordering them to devalue and continue buying US dollars too!
For a laugh, the Chinese, just after its GDP size officially passed by Japan to get the second biggest economy World Title ,fired off a warning shot At the US by indirectly shooting a currency bomb at US lackey Japan, who were noisily siding with America against the Yuan . So China bought Yen bonds instead of US bonds. This had the effect of raising the value of the Yen making it difficult for Japanese exporters to compete with Chinese exporters in world trade. Pussy weak Japan had to spend billions in a desperate attempt to keep a low Yen value.
But,what fun For the Chinese! Round one goes to China!
The bankrupt US side of the Tag Team in the World Wide Currency (WWC) wars looks pretty weak too!
Will it step into the ring to rescue their partner and fight the Mighty Yuan for round two?
China is now nuclear missile armed and does not fear old western style Gunboat diplomacy of the opium trade commodity wars type, or even naval threats of the “Black Ship” type that America once sent to open up Japan for “free trade”.
P.S. on Round 2.
ReplyDeleteAnother report on the preliminary matches of the World Wide Currency Wars(WWCW) leading up to the main match soon, with the inflated “Paperboy Sam” expected to be taking on the “Mighty industrial Yuan “ soon .
The ‘Yellow Yen” an early Asian strutter ,a past winner now has been ,still insists on directing his knockout blows at himself, but is now deeply winded and is not expected to be in any condition to fight on for much longer .
“Yellow Yen” may even soon be tossed right out of the export ring by the Mighty Industrial Yuan!
"Sayonara ! Jappanese imperiarist " .
"Remember the Rape and massacre of Nanjing !"
The "Mighty Yuan" shouts victoriously!
Soros and other currency gamblers are believed to be making side bets.
Hedge funds and individual traders made a killing at ‘Yellow Yens” expense.
As we can see here in this report of another later sayonara round of the currency wrestling match wars on Zero Hedge.
The half-life of central bank interventions is getting shorter and shorter. After Shirakawa decided to show the Fed who is boss, only to be met with the biggest beatdown the dollar has experienced since March, tonight the BOJ decided to show Bernanke how it's done. Too bad the idiots at the BOJ have learned nothing from the SNB's Hildebrand, who was last seen cowering in a fetal positions, underneath his desk. After surging by 100 pips post the second intervention in a row, the "wolfpack" is back, and the yen has retraced more than half it losses in under 2 hours. This pathetic attempt to weaken its currency has just cost the BOJ another few trillions yen, while the end result is the same: a Japan whose export economy is about to be crushed, and a central bank president who will now be forced to join the ranks of the unemployed within a month.'
http://www.zerohedge.com/article/boj-intervenes-second-time-week-fails
You are absoultely right and wrong...They seem to defiy the laws of economics and trust me they will continue to do so till one day it all explodes but I've been waiting for a collapse since mid 200 and zip so far...Lots of examples that it should but somehow it still floats.
ReplyDeleteI am amazed at what slight of hand they've been able to do...I give it at least another year and a half...Because they might be evil and liars but they are skilled evil liars.