Money For Nothing

Japan Ramps Up its Monetary Race to the Bottom

"So, the model for Japan today is their version of the New Deal. I'll assume that Japanese politicians will ignore that connection between easy money, inflation and war, and forget that such policies ended rather badly for the Japanese in 1945. LRC's own Mike Rogers reports from Tokyo that 'Japan's Debt Explosion [is] Coming Up'. Earlier, Rogers wrote that even the monied upper classes are starting to worry. Standards of living continue to fall or go nowhere." Continue reading →

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China Accounts For Nearly Half Of World’s New Money Supply Since 2005

"After having less than half the total US deposits back in 2005, China has pumped enough cash into the economy using various public and private conduits to make even Ben Bernanke blush: between January 2005 and January 2013, Chinese bank deposits have soared by a whopping $11 trillion, rising from $4 trillion to $15 trillion! We have no idea what the real Chinese GDP number is but this expansion alone is anywhere between 200 and 300% of the real GDP as it stands now." Continue reading →

Continue ReadingChina Accounts For Nearly Half Of World’s New Money Supply Since 2005

Revolutionary Japan is suddenly the centre of world affairs

"We all watch with disbelief as China and Japan rattle sabres over the Senkaku/Diaoyu islands, so like the seemingly minor events that drew Europe's alliance systems into conflict from 1911 onwards. Both graduated to fighter jets last week: Japan sending in F-15s; China deploying J-10s, and mobilising the East China Sea fleet for live ammo drills. China's purpose is clear. It is testing the US security umbrella, and Washington's willingness to risk conflict to back Asian allies." Continue reading →

Continue ReadingRevolutionary Japan is suddenly the centre of world affairs

Bernanke’s Plan…If He Identifies Bubbles

"So what's Bernanke's plan, should one of these bubbles occur? Throw some bureaucrats at it first! Surely he means some new goofy laws, but can Bernanke also mean price controls? He has said that: 'The achievement of price stability must not and will not be jeopardized…I am also confident that, when the time comes, the Fed will act to ensure that inflation remains firmly under control.' The next step that governments usually take to give the illusion that 'inflation remains firmly under control' is to enact price controls. Will TSA agents be sent into out of the airports and into the streets to make sure that the price of tomatoes aren't 'too high'?" Continue reading →

Continue ReadingBernanke’s Plan…If He Identifies Bubbles

Detlev Schlichter: Bubble trouble: Is there an end to endless quantitative easing?

"Any pretence of the ‘independence’ of central bankers has been unceremoniously dumped in Japan. Ministers take part in central bank meetings and give joint statements with central bank governors afterwards. New Prime Minister Shinzo Abe has made it very clear what he wants the central bank to do (print more money faster, devalue the Yen, create inflation) and to that end he is looking for a new central bank governor. Of course, only accredited ‘doves’ need apply. A few days ago, Mr. Abe also spelled out what skill-set he is really looking for: good marketing skills. Salesmanship." Continue reading →

Continue ReadingDetlev Schlichter: Bubble trouble: Is there an end to endless quantitative easing?

Bernanke Said to Minimize Asset-Bubble Concern at Meeting

"The Fed chairman brushed off the risks of asset bubbles in response to a presentation on the subject from the group, one person said. Among the concerns raised, according to this person, were rising farmland prices and the growth of mortgage real estate investment trusts. Falling yields on speculative- grade bonds also were mentioned as a potential concern, two people said. The 'first line of defense' if bubbles emerge 'needs to be regulatory and supervisory' actions rather than changes in monetary policy, according to Bernanke." Continue reading →

Continue ReadingBernanke Said to Minimize Asset-Bubble Concern at Meeting

Fed, uneasy over ‘QE,’ plans bond-buy debate

"Minutes of the Federal Reserve’s January meeting released Wednesday reveal that many Fed officials are worried about the costs and risks arising from the $85 billion–per–month asset-purchase program. And they all seem to have their own ideas on how to proceed. Several Fed officials said the central bank should be prepared to vary the pace of the asset-purchase plan depending on the outlook or how the program was working. One wanted to vary it on a meeting-by-meeting basis." Continue reading →

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New Zealand signals readiness to join currency wars

"New Zealand’s central bank governor was ready to intervene in foreign exchange markets, he said yesterday, the latest in a string of countries from South Korea to Brazil warning their currencies were too strong even as Group of 20 (G20) nations pledged to refrain from competitive devaluation. Policymakers in South Korea and the Philippines are weighing curbs to capital inflows while Norway’s central bank said it was ready to cut interest rates to counter the krone’s strength. 'There seems to be a sense that the gloves are off in terms of central bank action in currency markets,' said Mitul Kotecha, global head of foreign exchange strategy at Credit Agricole." Continue reading →

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Norway Ready to Use Rate Cuts to Weaken Krone, Central Bank Says

"Policy makers around the world are discussing how to respond to a re-emergence of so-called currency wars as finance ministers from the Group of 20 gather in Moscow. Norway’s central bank governor has shown before he’s willing to deploy rates to cap excessive krone gains, cutting the benchmark by 0.75 percentage point in two moves starting in December 2011. Olsen and his colleagues are torn between protecting exporters through lower rates that stem krone gains, and a policy that addresses an overheated property market." Continue reading →

Continue ReadingNorway Ready to Use Rate Cuts to Weaken Krone, Central Bank Says