Posted on 04/03/2013 6:29:19 PM PDT by blam
Edited on 04/03/2013 6:31:19 PM PDT by Admin Moderator. [history]
This is it – the moment the Abenomics-watchers have been waiting for.
Wednesday night, the Bank of Japan will conclude its first monetary policy meeting with new BoJ Governor Haruhiko Kuroda at the helm.
So far, Japan's great "Abenomics" experiment – which seeks to employ bold policy tools to overcome more than a decade of deflation – has been mostly talk.
Now, the rubber meets the road for Kuroda, the monetary policy dove selected by recently-elected Japanese Prime Minister Shinzo Abe to lead the charge from the BoJ, which has to do a lot of the heavy lifting.
There are a few things everyone is looking for, according to analysts at Morgan Stanley, BofA Merrill Lynch, and Deutsche Bank – an increase in the size of the Bank of Japan's quantitative easing program, a directive to start buying longer-dated bonds as part of those asset purchases, a cut in the interest rate the central bank pays on excess reserves, and stepped-up purchases of risk assets like ETFs.
Below is what BAML analysts Shogo Fujita, Masayuki Kichikawa and Shuichi Ohsaki predict for Kuroda's meeting.
Announcement of early introduction of an open-ended framework (FY13).
A suggestion of a forward-guidance framework. (such as “easing to continue until a 2% inflation target is feasibly attainable”)
Announcement of elimination of the banknote rule and unification of JGB purchases through the APP and rinban operations. (We expect the APP will be maintained for risk assets, integration will depend on the construction of procedural systems i.e. will not be immediate)
Extension of the central JGB purchasing zone to longer maturities (with the shift to full rinban this is fully expected
(snip)
I’m a Kyle Bass fan.
I think she’s gonna blow....
Remember when we were all told that the Japanese model of a government-industry partnership was going to rule the world.
That does not sound very Milton Friedmanish.
Can someone translate Econese?
Yeah.
We are DOOMED!
;)
In other words, they’re going to try and inflate and bailout their way to a booming economy.
Full disclosure, I only took a few economic classes in college, I’m not a guru.
Do you have you nickels ready?
I bought a massive load of junk silver back in the Carter inflation years. Krugerrands too.
Oh, Yes, I remember...I worked at Intel at the time...KANBAN...
All of this international correction, over-correction, gerry rigging.. It can only have one outcome and it’s not good.
Good.
I bought Krugerrands in the early 90's too.
Psst,...those silver Krugerrands WERE junk.
Having been to Japan multiple times since the early 90s - I can only assume the are talking deflation in regards to non-essentials and the burst real estate bubble. Prices for everyday things in yen and dollars both are more expensive then the early 90s - even soda machines are 110-150 yen compared to 100 yen. Sounds little different then what were going through now - a bimodal economy. They are only looking at the banking industry in my mind and not the everyday world - horse blinders in full mode.
Kyle Bass does a good presentation on Japan as the front leader in the global meltdown to come.
As I remember he presents the debt service the government of Japan is obligated to make payments on and looks at these required debt payments against the government revenues.
If I recall correctly he claims the government revenues can just cover payments against debt. Thus, the government is insolvent and can’t sell more debt because it can’t pay the interest due.
The Japanese government can still print money but that can cause inflation in consumables and also affect exports for which the economy is significantly dependent.
If China ends up at the helm as the new world currency standard .... The US dollar could be in for a heckuva bumpy ride ..... if not terminal ... and Japan could be on a much better financial footing..... at least for a while.
The Nikkei-225 closed up 2,20%.
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