Tag Archive: Haruhiko Kuroda

From QE to Eternity: The Backdoor Yield Caps

2020-06-04

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2020-06-04

Japan - JGB, 1986-2019
So, you’re convinced that low rates are powerful stimulus. You believe, like any good standing Economist, that reduced interest costs can only lead to more credit across-the-board. That with more credit will emerge more economic activity and, better, activity of the inflationary variety. A recovery, in other words. Ceteris paribus. What happens, however, if you also believe you’ve been responsible for bringing rates down all across the curve…and...

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What Happens When Central Banks Buy Stocks (ETFs)? Well, We Already Know

2020-03-13

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2020-03-13

Japan Machine Tool Orders, 2010-2020
Can we please dispense with all notions that monetary policy works? Specifically balance sheet expansion via any scale asset purchase programs. Nowhere has that been more apparent than Japan. Go back and reread all the promised benefits from BoJ’s Big Bang QQE that were confidently written in 2013. The biggest bazooka ever conceived has fallen short in every conceivable way.

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What Tokyo Eurodollar Redistribution Really Means For ‘Green Shoots’

2019-05-02

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2019-05-02

TIC - US Banking Data
Last April, monetary officials in Japan were publicly contemplating ending asset purchases under QQE. This April, they are more quietly wondering what other financial assets they might have to buy just to keep it all going a little longer. I’d suggest something like the clouds passing over the islands or the ocean water surrounding them. Nobody would notice either way and it would be equally as effective.

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Something Different About This One

2019-02-22

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2019-02-22

China Retail Sales, Automobiles 2001-2018
In Japan, they call it “powerful monetary easing.” In practice, it is anything but. QQE with all its added letters is so authoritative that it is knocked sideways by the smallest of economic and financial breezes. If it truly worked the way it was supposed to, the Bank of Japan or any central bank would only need it for the shortest of timeframes.

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Insight Japan

2019-01-16

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2019-01-16

Japan CPI Food, Jan 2013 - 2019
As I wrote yesterday, “In the West, consumer prices overall are pushed around by oil. In the East, by food.” In neither case is inflation buoyed by “money printing.” Central banks both West and East are doing things, of course, but none of them amount to increasing the effective supply of money. Failure of inflation, more so economy, the predictable cost.

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Economics Is Easy When You Don’t Have To Try

2018-12-11

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2018-12-11

Japan GDP, Quantitative and Qualitative Easing, Jan 2008 - Mar 2018
The real question is why no one says anything. They can continue to make these grossly untrue, often contradictory statements without fear of having to explain themselves. Don’t even think about repercussions. Even in front of politicians ostensibly being there on behalf of the public, pedigree still matters more than results.

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And Now For Something Completely Different

2018-05-20

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2018-05-20

Japan Real Gross Domestic Product, Jan 2008 - 2018
Back in February, Japan’s Cabinet Office reported that Real GDP in Japan had grown in Q4 2017 for the eighth consecutive quarter. It was the longest streak of non-negative GDP since the 1980’s. Predictably, this was hailed as some significant achievement, a true masterstroke of courage and perseverance. It was taken as a sign that Abenomics and QQE was finally working (never mind the four years).

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Yanking the Bank of Japan’s Chain

2017-08-13

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2017-08-13

Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation. The social safety nets of industrialized economies, including the United States, have frayed at the edges. Soon the safety net’s fabric will snap. This recognition is not an opinion. Rather, it’s a matter of basic arithmetic. The economy cannot sustain the government obligations that have been piled up upon it over the last 70 years.

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Systemic Depression Is A Clear Choice

2017-04-05

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2017-04-05

Japan CPI, Jan 2010 - 2017
Looking back on late 2015, it is perfectly clear that policymakers had no idea what was going on. It’s always easy, of course, to reflect on such things with the benefit of hindsight, but even contemporarily it was somewhat shocking how complacent they had become as a global group.

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FX Daily, July 26: Strange Day: Yen Soars , Swissie Falls

2016-07-27

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2016-07-27

The Swiss Franc strangely depreciated on a day, when the other safe-haven, the yen strongly improved. The euro went up to 1.0899 by 0.54%. The reason seems to be technical.

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FX Weekly Preview: BOJ and FOMC Meetings Featured in the Last Week of July

2016-07-25

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2016-07-25

A recent Reuters poll found about half of the 100 economists surveyed expect a hike in Q4, which really means December since the November meeting is too close to the national election. The other half is split between a Q3 rate hike (September) and some time in 2017. That said, two primary dealers anticipate no hike until the end of 2017.

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The Central Planning Virus Mutates

2016-07-20

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2016-07-20

Readers are probably aware of recent events in Japan, the global laboratory for interventionist experiments. The theories of assorted fiscal and monetary cranks have been implemented in spades for more than a quarter of a century in the country, to appropriately catastrophic effect.

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Bank of Japan: Destination Mars

2016-07-18

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2016-07-18

Asset Price Levitation One of the more preposterous deeds of modern central banking involves creating digital monetary credits from nothing and then using the faux money to purchase stocks. If you’re unfamiliar with this erudite form of monetary policy this may sound rather fantastical.

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“It’s Prohibited By Law” – A Problem Emerges For Japan’s “Helicopter Money” Plans

2016-07-14

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2016-07-14

Over the past four days, risk assets have been on a tear, led by the collapsing Yen and soaring Nikkei, as the market has digested daily news that - as we predicted last week - Bernanke has been urging Japan to become the first developed country to unleash the monetary helicopter, in which the central banks directly funds government fiscal spending, most recently with an overnight report that Bernanke has pushed Abe and Kuroda to sell perpetual...

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The EU Begins to Splinter, a new Tsunami for Kuroda

2016-06-24

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2016-06-24

Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par.

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World’s Central Bankers Gathering At BIS’ Basel Tower Ahead Of Brexit Results

2016-06-22

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2016-06-22

What happens on the 18th floor of the main tower at Centralbahnplatz 2 in Basel, stays on the 18th floor of the main tower at Centralbahnplatz 2.

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Turning Stones Into Bread – The Japanese Miracle

2016-06-03

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2016-06-03

  Stuffing the Futon Our friend Ramsey Su just asked what Haruhiko Kuroda and Shinzo Abe are going to do now in light of the strong yen (aside from perhaps doing the honorable thing). Isn’t it time to just “wipe out some debt with the stroke of a pen...

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The Japanese Popsicle Affair

2016-05-20

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2016-05-20

  Policy-Induced Contrition in Japan As we keep saying, there really is no point in trying to make people richer by making them poorer – which is what Shinzo Abe and Haruhiko Kuroda have been trying to do for the past several years. Not surprisingly,...

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Kuroda-San in the Mouth of Madness

2016-05-14

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2016-05-14

  Deluded Central Planners Zerohedge recently reported on an interview given by Lithuanian ECB council member Vitas Vasiliauskas, which demonstrates how utterly deluded the central planners in the so-called “capitalist” economies of the West have bec...

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