Posted on 10/31/2014 4:32:42 AM PDT by blam
Mike Bird
October 31, 2014
The Nikkei closed up 4.83%, hitting a seven-year high after the Bank of Japan (BoJ) unexpectedly announced it was expanding its monetary easing policy Friday morning.
In a tight vote, the BoJ backed an 80 trillion yen ($720 billion) target for expanding the monetary base (a measure of the amount of money held by the central bank and in the economy). That's up from a previous target of 60 trillion to 70 trillion yen.
Analysts were basically not expecting anything Friday: this one was a genuine surprise. Just as the Fed this week announced the final tapering of QE3 (in which the monthly bond purchases the Fed had been making were stopped), the Bank of Japan is hitting the gas.
No prizes for spotting the announcement on this graph of the Nikkei:
This was a major unexpected move by Haruhiko Kuroda, the Bank of Japan's governor, and a big new chapter in the country's "Abenomics" experiment, named after Prime Minister Shinzo Abe.
It's all in reaction to a slowdown in inflation. The BoJ has committed itself to reaching a 2% inflation target, but core inflation dropped to 1% from 1.1% in October, the lowest in nearly a year. Kuroda has repeatedly expressed this goal, but it seems as if markets only halfway believed him.
(snip)
(Excerpt) Read more at businessinsider.com ...
Here's the scorecard:
France's CAC 40 is up 2.02%
Spain's IBEX is up 1.74%
Italy's FTSE MIB is up 1.78%
Britain's FTSE 100 is up 1.15%
Germany's DAX is up 1.60%
Asian markets saw a massive rally. The Nikkei closed up 4.83%. The Hang Seng closed up 1.25%.
Stop talking sense and print some more money.
Gimmie a wheelbarrow too.
Some folks think all this unprecedented fluctuation is a good thing and point to the high markets. All we are doing is to keep spinning the barrel from .22 to .32 to.380 to 9mm to .45 to .357 to .44 mag and won't pull the trigger until we have a freaking cannon ball in the chamber...
There’s a hard rain gonna fall.....
Yeah but.
In the meantime, the .44 is twice as cool as a .22, and you have a much better shot at finding ammo at Wal-Mart.
It’s all so exciting!
I hate booms because they are always followed by a bust... especially when they are created booms with no underlying value. Underlying value... there is an old worthless concept isn’t it?
I have a recurring dream of being on a skyride and launched up into the air. It is thrilling until the rise begins to slow and I realize that I will not simply levitate at the apogee of my travel but will soon be falling at a rate only controlled by gravity. I am filled with dread and then terror as the fall begins and accelerates to my death.
What could go wrong?
At the first sign of trouble, all of the QE that bought into the market is going to rush to the door. The crash will be Hindinburg-like. Oh the humanity!
Stagflation
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