Policy-Induced Contrition in Japan
As we keep saying, there really is no point in trying to make people richer by making them poorer – which is what Shinzo Abe and Haruhiko Kuroda have been trying to do for the past several years. Not surprisingly, they have so to speak only succeeded in achieving the second part of the equation: they have certainly managed to impoverish their fellow Japanese citizens.
Photo credit: Toru Hanai / Reuters
Deluded Central Planners
Zerohedge recently reported on an interview given by Lithuanian ECB council member Vitas Vasiliauskas, which demonstrates how utterly deluded the central planners in the so-called “capitalist” economies of the West have become. His statements are nothing short of bizarre (“we are magic guys!”) – although he is of course correct when he states that a central bank can never “run out of ammunition”.
BoJ governor Haruhiko Kuroda
Photo credit: Toru Hanai / Reuters
Damned If You Do…
After waking up on Thursday, we quickly glanced at the overnight market action in Asia and noticed that the Nikkei had tanked rather noticeably. Our first thought upon seeing this was “must be the yen” – and so it was:
What Determines a Currency’s Value?
At the end of March the price of the euro in terms of US dollars closed at 1.1378. This was an increase of 4.7 percent from February when it increased by 0.3 percent. The yearly growth rate of the price of the euro in US dollar terms jumped to 6 percent in March from minus 2.9 percent in February.
A Return to Gold
BUENOS AIRES, Argentina – “What if you were appointed to head the Fed? In your first week on the job, what would you do?”
The question was not exactly serious. Neither was the answer.
“We’d call in sick.”
Sorry boys and girls, you’ll have to start without us…
Photo credit: Susan Candelario
The Hard Rocks of Real Life
BALTIMORE – The Dow dropped 174 points on Thursday, the biggest fall in six weeks. Not the end of the world. Maybe not even the end of this year’s bounce-back bull run. As you’ll recall, stocks sold off at the beginning of the year, too. Then, investors were buoyed up after central banks got to work – jimmying the credit market on their behalf.
Photo credit: Andrei Shumskiy
No Return to Normal
BALTIMORE – On Tuesday, the Dow sold off – down 133 points. Oil traded in the $36 range. And Donald J. Trump lost the Wisconsin primary to Ted Cruz. Overall, world stocks have held up well, despite cascading evidence of impending doom.
U.S. corporate profits have been in decline since the second quarter of 2015. Globally, 36 corporate bond issues have defaulted so far this year – up from 25 during the same period of 2015. Economists at JPMorgan Chase put the U.S. economy growth rate for the first quarter at 0.7% – down by over one-third from earlier estimates.
It Wasn’t Supposed to Do That…
When you’re a central banker in a pure fiat money system and even your ability to print your own currency into oblivion is questioned by the markets, you really have a problem. This is actually funny on quite a number of levels if one thinks about it a bit…
Haruhiko Kuroda (a.k.a. Kamikaze) is such a central banker. His valiant attempts to make Japan richer by making its citizens poorer is beginning to be rejected by Mr. Market:
Kuroda-san’s latest monetary depredations continue to backfire (from his perspective, that is). The chart of the yen actually continues to look quite bullish here – it is in the process of breaking out and has just attained a new 17 month closing high – click to enlarge.
BALTIMORE – We live in a world of sin and sorrow, infected by a fraudulent democracy, Facebook, and a corrupt money system. Wheezing, weak, and weary from the exertion of trying to appear “normal,” the economy staggers on.
Image credit: David Sidmond
A Witless Tool of the Deep State?
Finance or politics? We don’t know which is jollier. The Republican presidential primary and Fed monetary policies seem to compete for headlines. Which can be most absurd? Which can be most outrageous? Which can get more page views?
Politics, led by Donald J. Trump, was clearly in the lead… until Wednesday. Then, the money world, with Janet L. Yellen wearing the yellow jersey, spurted ahead in the Hilarity Run.
Leaning Into the Wind
BALTIMORE – During our lifetime, three Fed chiefs have faced a similar challenge.
Each occupied the chairman’s seat at a time when “normalization” of interest rates was in order.
Recently, we remembered William McChesney Martin, head of the U.S. Fed under the Truman, Eisenhower, Kennedy, Johnson, and Nixon administrations. Today, we compare Martin with two of his successors, Mr. Paul Volcker and Ms. Janet Yellen. We allow you to draw your own conclusion.
Punchbowl theft alert!
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