Yen went on a free fall to a 24 year low yesterday. It is the third largest fiat currency in the world. Japan is also the largest holder of US treasuries.
there's a recession happening, it's global, the central banks can't avoid it by manipulating interest rates, and prices are going to rise throughout it for most of the world.
Reading this Zerohedge piece on it, it seems like Japan's been buying back bonds by a large amount since 2013. Exactly one year after Shinzo Abe returned to Prime Minister. His Abenomics was basically an inverse of China's 5 year plans where instead of investing in infrastructure and real wealth generation (i.e. productive capacity) it's made it easier and necessary for companies to financialize and rip more value from workers in Japan and maybe a mild amount of automation of labour.
Specific image: https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/JGB%20purchases.jpg?itok=_d64GLzD
Article: https://www.zerohedge.com/markets/japan-verge-systemic-collapse-dramatic-unpredictable-non-linearities-financial-markets-bank
I remember reading dipshit Noah Smith try to defend it on the Japonisme website and even he couldn't really make a good case for it outside the usual neolib doubletalk. According to some writing by Michael Roberts Japan's income equality, etc. has all gotten worse over the past 2 decades, especially under Abe, and they can only ride the wave of western imperialism to buttress their consumption. The output of workers in Japan is half that of workers in the US or something. I don't see how they can continue this system they have, it's just constant decline and I don't know if they can keep printing money to buy back bonds forever.
The output of workers in Japan is half that of workers in the US or something
That's what happens when your country obsessively protects its dinosaur corporate entities to the point that they still use fucking fax machines in the country with the reputation as the most technologically forward-thinking place on the planet. Japan's had an issue with being so hyper-focused on the idea of "if it ain't broke don't fix it" for so long that they rewrote what "broke" means to continue to avoid fixing anything.
it's comical, there are tons of cross-company procedures that cannot be done any other way than by fax machine
Hell Germany has a similar reputation and yet SO many of their large businesses still use fax
I remember being glued to zerohedge back in 2011 when it looked like the sovereign debt crisis would be the big collapse. Remember the PIIGS?
yeah I just got an unexpected email from my Bank, talking about inflation and how to budget your spending. I don't mind another 2008 coming, this system needs a reckoning or we're all doomed in a few short decades.
I starter "investing" in January from a windfall and putting $100 away a month into an index fund. The market started collapsing pretty much right away, I'm considering my continuous investment as a real magic hex to collapse the economy and there is nothing they can do to make me stop. I will destroy the capitalist economy and if it just cost me $100 a month to do it, we'll that's just my cross to bear.
I also started in January. Lost 1000€ in the last week alone.
That money could have bought a lot of premium booze, the only 40% I'm going to see anyway.
a reckoning means the world finds a new dominant ideology -- whatever new form of liberalism replaces neoliberalism -- and a contingent economic policy that opens up new markets for exploitation... or... we're all gonna be enmeshed in war for decades. kinda hoping this one turns out not to be the big one just cause I was planning on a couple more years to prepare...
Tons of dried food like white rice, beans, whole corn, etc will last 20+ years if stored below 100f/40c.
A 5 gallon food-safe bucket is the best choice for storage. They are stackable, vermin-proof, and air/water proof that cost ~$8 with lid at a hardware store.
Each 5 gallon bucket can hold roughly enough calories for a month of food for one person. If you go with white rice or lentils that can be had as cheaply as ~$25-30 per bucket.
This is good for a potential total collapse but also the best prep is honestly to have a community of people you can rely on and trust. Alone and prepped is the same as alone and unprepared.
We have them because we live in earthquake country.
Estimated time to get power back to our property after the Big One will be 6+ months.
Turbo-Mammonism, the ideology of throwing kids in to a giant pit to appease the money god.
It's because there's more going on than which can be fixed by interest rate changes. Housing is about the only thing they can affect other than interest rates (because mortgages). They can't do shit for war, supply chain issues, etc.
they're trying to destroy demand to alleviate the supply shortages by raising the cost of money. it won't work because the problems are on the supply side (prices will keep going up as businesses struggle to make a profit) and demand for essentials can only fall so far, but it will have a wonderful impact: the middle classes will be out for blood over the next couple of years. by destroying the fascist economic base, they're ensuring that angry fascist mob takes power.
:angel-biblical: For this, our second recession of the 21st century -- The Second Dot Com Crash -- The Venture Capital Burst -- or -- That Thing We All Kinda Suspected Was Inevitable -- I predict:
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increased austerity
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an investment firm bailout, for our poor small-bean investors whom never expected crypto-
securities-currencies to be misrepresented -
$TSLA is Too Big To Fail. What does that mean for an investment portfolio pretending to be an automobile manufacturer? No clue.
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Phoenix becomes very dry. Body count dry. Don't expect much coverage of this. It will be like the west coast wildfires of the last two years, another ecological disaster playing second fiddle to a dumber, more easily rectifiable disaster.
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prediction is a fools game, so here's the only one that counts: Nothing will fundamentally change in the imperial core, but living and working conditions will get worse.
My girlfriend just bought a townhouse on the West coast at peak cost :sadness-abysmal:
I let her know that I suspect the housing market is in a bubble but ultimately it’s her money and her call
It’s hard to say too. I bought and sold a little rundown bungalow in 2018-2020. I panic sold during the pandemic because I lost my job and the economy was collapsing and I suspected housing would too.
I made out ok, but would be in a much better spot today if I kept the house.
Australia is tipping towards this too (no 2008 housing price reset either).
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Russia out here like the main character in a martial arts cartoon looking for the weak spots in a boulder to break it with their finger
Russia really has one of the only strengthening currencies right now despite all of this shit
It's almost like if you focus on internal affairs and build a self sustaining economy based on your natural resources it pays off
I see you, I hear you, but what about an economy where the government directly prints money to hand to investors, who then endlessly shuffle it around between each other and bet on various ways they can shuffle it later, and every single job is based on helping to shuffle the money around or sell coffee to the shufflers.
Sounds like one of the best economic systems I've ever heard of.
Forgot my original post. Everything should be based on this type of scheme that will never faulter
They aren't doing what western countries are doing and it's spooking investors.
Bank of japan is trying to control the interest rate of bonds by buying bonds from the open market. This increase the supply of money which can cause inflation. This worry is probably what is causing the line to go down. It may be justified, it may not be, it's a crazy time and nobody can know what will happen.
So here's the thing, even if Japan loses their interest rate peg and yield curves go out of control, it may not even matter. People claim that yield curves are predictive of a recession but theres no real reason for it.
BOJ has an unlimited bond buying policy. I guess the problem is that a lot of Japan's debt/trade/holdings isn't in their own currency? I didn't really look into it yet.
What the fuck does manipulating bonds with yield curve control mean?
WTF the vocel police were right :volcel-judge: ! KEEP YOUR VITAL ESSENCES TO YOURSELF RIGHT NOW
Basically it means controlling the amount of bonds that are owned/being purchased by raising or lowering their yield at the date payout is due.
Here is a good article explaining why Japan specifically does this
I don't understand step 2 of this plan. they prop up prices on artificially low yielding bonds, but what does this accomplish beyond inflating the value of the currency away? how will they stave off riots when food, rent, and gas prices spiral out of control?
they prop up prices on artificially low yielding bonds, but what does this accomplish beyond inflating the value of the currency away?
The cheap lending keeps businesses from going into recession mode and firing a bunch of people. If money is cheap, labor is also cheap and the incentive is to maintain/grow staff.
how will they stave off riots when food, rent, and gas prices spiral out of control?
I mean, Japan is about even on Imports/Exports, so as long as the rest of the world keeps buying their manufactured products, they'll have equivalent cash-on-hand to import food and energy. As to rents, the Japanese population is contracting rather than expanding. So real demand for housing is falling while real demand for labor is rising. The real challenge Japan faces is a foreign investment in housing that drives unit prices up well above what lay residents can afford.
The consequence of this sky-high real estate cost has been... a collapse in new families and new children, resulting in a tightening labor market and soft floor on housing demand. I would worry less about rioters than squatters in this situation.
They don’t. They’ve just kept kicking the can down the road ever since their first bout of stagflation with increasing severity each time
They're trying to change how money moves by buying/selling corporate bonds. The same shit the US government does. The US bond market has been fucked for a few days too. Everyone is trying to take plays from the good liberal economics playbook. We'll see how it turns out.
It was only a matter of time if you could just go to the skulltula house and get a huge rupee as many times as you want
Time to buy all the anime waifu figurines and sell them at inflated price
:so-true:
The US Federal Reserve has an infinite appetite for Treasury Notes. And with rising interest rates, I-Bonds are already trading at a premium.
So, they sell foreign currency. What do they have to sell? Only the second-largest stash of UST securities.
:deeper-sadness:
So you're saying its time to import all the weeb shit you've been eyeing?
Finally a box set of any mid 90s anime season will cost less than $80, I knew I was right to play the long game. Only took 30 years.
Computer, enhance around the date of the inflection point.
:putin-wink:
