Full Definition of INSANITY
1: a deranged state of the mind usually occurring as a specific disorder (as schizophrenia)
2: such unsoundness of mind or lack of understanding as prevents one from having the mental capacity required by law to enter into a particular relationship, status, or transaction or as removes one from criminal or civil responsibility
3 a : extreme folly or unreasonableness
b : something utterly foolish or unreasonable
Of course we could also look at the “real definition” of insanity, “doing the same thing over and over again while expecting a different result”. http://www.reuters.com/article/2015/04/01/us-japan-economy-boj-idUSKBN0MS36S20150401
Or, we could just look at a real life display of insanity to know what it is. Its name is “JAPAN Inc.”! Think of the above definitions, doesn’t Japan either financially fit each and every one of these or at least it’s their leaders hope that they do? Think about what Japan has done over these last 25 years and now doing even more so? They believe by simply printing money, they will be able to prosper and erase all foolishness …with of course more foolishness.
Specifically, Japan embarked on “Abenomics”, their version of American “QE”. Currently the Bank of Japan is buying more treasury debt than their Treasury is issuing. They have also been supporting their stock market since at least 2010, and doing it publicly. At the current pace, the bank of Japan will own ALL ETF’s in little more than two years. Next they will be targeting individual stocks to tuck away and into their portfolio.
There are some very unintended consequences to all of this. If they keep buying sovereign debt, this will continue to reduce the amount of marginable collateral available and at the same time reduce liquidity even further, http://www.zerohedge.com/news/2015-04-01/bank-japans-liquidity-crisis-one-chart . Could it be that what started out as being a liquidity crises actually ends as a liquidity crises …made worse by their own actions? While on the subject of debt, Japan initially balked at joining the AIIB, then applied …and now apparently has withdrawn. Will they really be one of the very few Western nations not to join the party…and in their own backyard?
Moving away from finance and looking more toward the real world, Japan is considering building a 250 mile long “protective seawall”. This presumably to prevent any more tidal waves from crashing the island. The last one as you remember breached Fukushima and caused a nuclear accident. The response to this accident has been “insane”, they decided to pour sea water on the reactors to keep them cool …and then drain the radioactive water into the ocean. Sushi anyone? Now, it seems they have even “lost” one of the reactors and cannot locate it!
Asking a few common sense questions, would you lend money at virtually zero percent interest to someone who owed over 200% of their income? This is the case with Japan, their debt to GDP ratio is over 200% and they can proudly say “they are the world leader” in this category. The next question, if your proposed debtor told you they wanted to pay you back in a currency they would actively try to debase, would you do it? This of course is the heart of Japan’s grand plan, devalue the yen …undercut your manufacturing competition …increase exports and as a side dish …pay your debt back with a currency worth less …or even worthless! As a side note, Japan has been running trade deficits, so they haven’t even put a dent in their trade problems.
I wanted to bring Japan back into the picture because they have seemed to be hiding. They are a huge problem but have been kept in the background. They are the number three or four economy in the world and are also one of the top three holders of U.S. Treasuries along with China and of course the Federal Reserve. Japan is the epitome of the West’s Ponzi markets with the Bank of Japan monetizing their debt over 100% plus supporting their stock markets.
Ask yourself this question, for what possible reason could the Bank of Japan be buying more treasuries than are being issued? This is easy, but also very dumb. The plan is to outright devalue the yen and also to pump liquidity into their markets by printing and spending the new money on stocks and bonds. So far it has worked as their stock market has been on an upward trajectory with almost no corrections. The problem is this, it has also sucked the liquidity right out of the system and in case you need the connection made, volatility increases as liquidity decreases.
While Japan is not currently considered a “fuse” like the greatest show on Earth (Greece, Ukraine and Austria), they are a very big powder keg! Once one of these little flames start licking out, Japan, because they are so levered and thinly margined could easily go into a Friday close fat and happy …and just not open the following Monday. Regards, Bill Holter
Hi Bill,
Excellent article as usual, these central banks interventions are totally distorting the markets (does “free market” still exist?), the price discovery is just not there anymore, stocks and bonds markets are at all time highs without economic strings of data supporting such highs, there’s a decoupling between the “real” economy and the markets.
This cannot end well, as you mentioned so many times with the way the markets are leveraged, things can unwind very fast and drastic. Sad they did no learned from 2008 to clean their act, they only kick the can further down the road. The only big question mark is how long central banks “game” can last before it all crumble.
It seems common sense is not that common after all!
God bless,
Daniel
common sense is long gone. God Bless you too Daniel.
Insane manipulation to the point of almost being amusing.
This morning the price of gold got attacked exactly when expected.
To openly manipulate at the exact time that one can predict is simply proof THAT THOSE DOING THIS MANIPULATION BELIEVE THEY ARE ABOVE THE LAW.
Simply a statement attesting to the level of corruption prevalent in society today.
May the Lord someday make them accountable for their actions.
Everyone needs to be humbled at some point.
they have been above the law …so far.
DEFINITION of ‘Ponzi Scheme’ A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors.
Bill By definition this game they have played with the markets will eventually end.
When it ends….very few things will remain with value.
For that reason one must take steps such as buying PM’s.
Those that have taken steps to destroy the system will need to hide just to continue existing and avoiding the WRATH.
The loss of their freedom will be their just reward.
Spot on, Bill.
Isn’t it just like you to shine the light into dusty dark corners exposing the “inconvenient truth” that the lame-stream media ignore?
I’ve often wondered; do the “journalists” ignore these stories because they’ve been told to, or do they ignore them because they don’t support their worldview?
Hanlon’s razor states, “Never attribute to malice that which can be adequately explained by stupidity”. Perhaps the “journalists” just spectacularly prove Hanlon’s point.
you should ask Greg Hunter about this one, I bet he would disagree.
I don’t consider Greg as part of the lame-stream media. To that category I ascribe the alphabet television channels, and almost anything printed on paper.
Good point though; I would hate to debate Greg on almost anything!
what I was trying to say is that Greg is honest and was a part of alphabet media, it is not just stupidity, much is not reported on purpose.
one more, ask Chris Powell!
If, as you are arguing, Hanlon’s razor does not apply, we are left with either a complicit media, or one that is completely controlled by TPTB; both scenarios are frightening.
…controlled.
Good point from Brainpowermuse, for instance the AIIB is a MAJOR news for many reasons and the main media as not talk much about it so far, though Forbes as a good article:
http://www.forbes.com/sites/jplehmann/2015/04/02/china-and-the-us-the-aiib-fiasco-americas-colossal-loss-of-face/
It seems that the “big picture” is not taken into consideration when reporting. the focus is more on the “tree” instead of the “forest”!
Mr. Greg Hunter definitely understand the “big picture” of events. He’s one of my favorite.
Kind regards,
Daniel
I have nothing to base this on but a gut feeling but..
I see the trend on the eve of change..
A major move on gold and silver may soon be upon us.
Reality is coming home for a visit very soon.
Maybe I should bake a cake.
Bill – For sake of simple illustration and my understanding: Gold is $1200 per ounce and there are approximately 100 paper contracts on each one ounce of physical gold making paper gold worth $12 per contract. When the day comes that the paper game charade is exposed revealing that only 1 paper contract exists for each ounce of physical gold, would that bring paper gold on par with physical gold theoretically making gold worth $120,000 per ounce in the markets?
Have a great Easter weekend!
yes Ron, this is the theory. Looking at it from another angle, those who believe they have gold, really do not. Making the real metal more valuable.
Just more theft by the TBTF’s Bill.
This is the ABSOLUTE TRUTH.
http://www.youtube.com/watch?v=JFXyzqHl4sE
Good morning Bill,
I have two questions, about an ETF like Ishare Silver Trust (SLV). Do you think it is safe like to holding physical silver? What i checked about it, is a quite 100% backed paper in physical silver, but i´m not sure.
And if a bought through a bank, and this bank go bankruptcy, it´ll posible to my etf´s been confiscated? Or it´s solvency is apart from the bank, the risk is on the blackrock (etf releaser).
I´ll prize your comments, thanks and have a good easter!
Happy Easter to you Leandro! I believe real silver in hand is better. O am not sure about the silver held at SLV, I do believe Sprott’s PSLV is fully backed.
The other day I was trying to get a close friend to consider investing in physical silver, gave him all the reasons. His response was that we’ve had financial crisis before and the Feds always found a way out.
Perhaps many reporters feel the same and don’t wish to be accused of crying “wolf”.
If you cut a rope in half, then cut one of the halves in half and so on; it’s said you will never run out of rope,
But after a few cuts, it gets pretty hard to grip the next “half”.
exactly, and we are there now.
Thank you for the attention. From Brazil you have at least one friend! cheers
had a Brazilian exchange student years ago, have been to Recife on 4 different occasions.