Tag Archives: Bank of Japan

Submitted by Nicole Foss via The Automatic Earth blog, Part 1 Here. History teaches us that central authorities dislike escape routes, at least for the majority, and are therefore prone to closing them, so that control of a limited money supply can remain in the hands of the very few. In the 1930s, gold was the escape route, so gold was confiscated. As Alan Greenspan wrote in 1966: In the absence of the gold...

[unable to retrieve full-text content]As momentum builds in the developing deflationary spiral, we are seeing increasingly desperate measures to keep the global credit ponzi scheme from its inevitable conclusion. Credit bubbles are dynamic — they must grow continually or implode — hence they require ever more money to be lent into existence.

Lastly, a brief word about next week.  I will not post my usual piece on macro considerations on Sunday.  Here, though, is a brief thumbnail sketch of the top five things I will be watching:   1.  Yellen at Jackson Hole at the end of next week:  To the extent that she shares her assessment of the economy, I would expect to largely echo the broad sentiment expressed by NY Fed President Dudley. Click to enlarge. 2....

Summary: Major central banks and many economists are calling for higher wages. However, they are reluctant to offer proposals to strengthen those institutions who’s goal is to boost labor’s share of national income. The advocates are more interested in boosting prices than in lifting aggregate demand or addressing the disparity of income and wealth. Charlie Chaplin All that is solid is melting. After...

Annual population and labour force growth in Japan Which country, the United States or Japan, have had the fastest GDP growth rate since the financial crisis? Due to Japan’s bad reputation as a stagnant, debt ridden, central bank dependent, demographic basket case the question appears superfluous. The answer seemed so obvious to us that we haven’t really bothered looking into it until one day we started thinking...

Swiss Franc The Swiss Franc was nearly unchanged against the euro. Click to enlarge. FX Rates The US dollar closed the pre-weekend session well off its lows that were seen in response to the disappointing retail sales report. It has been unable to sustain the upside momentum, and as North American dealers prepare to return to their posts, it is trading lower against most of the major currencies. The notable...

Summary: The GDP deflator may be just as important as overall growth for BOJ considerations and the possibility of fresh action next month. Falling UK rates and a weaker pound are desirable from a policy point of view. Dudley’s press conference may be more important than FOMC minutes. Two German state elections that will be held next month comes as Merkel’s popularity has waned. Japan Japan’s Q2 GDP: The...

Summary: Liquidity rather than intrinsic value seems to be driving EM assets. MSCI EM equity index looks constructive technically. The chart pattern suggests scope for around 13% gains from here. Scratch an investor, and you will find two models.  One is a fair value model, perhaps based on free-cash-flow or earnings expectations, or breakup value.  The other is based on liquidity.  We suspect that the latter...

Swiss Franc Click to enlarge. FX Rates Investors favor risk assets today.  Global stocks are moving higher in the wake of the pre-weekend US rally that saw the S&P 500 close at record levels.  Bond yields are mostly firmer, again with US move in response to the robust employment report setting the tone in Asia.  European bonds participated in most of the pre-weekend move and are consolidating today with a...

Summary: Policy outlook is clear: ECB and BOJ review next month, FOMC still looking for opportunity. Inventory cycle making quarterly US GDP forecasting difficult, but it looks like re-acceleration still the more likely scenario than recessions. Why didn’t European bank stress tests results have more impact? The drip-feed of high frequency economic data from the major economies slows in the week ahead. The data...