Japan goes full QEtard and unleashes NIRP
  • If you follow the narrative, then Japan's economy is in slow recovery. If you follow the evidence, Japan is getting ever closer to the drain hole. 

    If you have read a news article about the economy or financial markets in the past 10 years, you've no doubt come across the term ZIRP (zero interest rate policy), and more recently NIRP (Negative Interest Rate Policy).

    NIRP has existed for a while now in certain countries in Europe, for very different reasons, but it's appearance in Japan (whose money printing presses are set to turbo and blasting out a window in the Nikkei trader's break room) is surprising.

    Also surprising was two weeks ago the US Treasury quietly sold 3 month T-Bills at 0.0000% interest rates, for the first time ever. (Because that's what healthy economies do, right?)

    Well, Japan, now currently on QE10 (and now called QQE) -to infinity and beyond! -very discreetly started selling its own bills (1 year bills) at -0.04% it's worst rate in history. For the uninitiated, this means that if you invest in these bonds you will actually get less back a year later than what you paid for them. Smart Investing 101 huh folks?

    The BOJ is expected to make an announcement on Oct 30, which many believe will be increasing its QE10 (aka QQE) beyond the already expanded parameters (it was almost precisely one year ago, on October 31 when the BoJ increased its QQE for the first time, announcing it would monetize JPY 80 trillion monthly, up from JPY60-70 trillion).

    However, since Japan has run out of sellers from whom it can buy Treasury paper, there is a possibility that Japan will follow Jordan, Draghi and Ingves and announce negative interest rates.

    Speculation among various sources seems to be that: 

    1)Fears over a US debt default are forcing holders of short-term US debt to rush out of US Bills and go into Japanese short term paper

    2)A US debt default, unlikely at this stage as it is, will require a market shock to stir the complacent GOP out of its trance that "Yellen will get to work", and from blocking the passage of a debt ceiling extension.

    3)Japan may itself be approaching the limits of ZIRP and be on the verge of NIRP

    Interesting times. 

    Incidentally, and this is just tossed in for the sake of trivia and to illustrate how hopelessly lost this country is, in addition to monetary and fiscal policy makers fresh from the insane asylum, Japan's governments (both at the local and national level) use simple cash accounting to manage their affairs. Perhaps people are unaware of the implications behind this, so to explain simply, every corporation on Earth uses accrual accounting to manage their finances and make balance sheets and budgets. The Japanese government on the other hand, the managers of the world's 3rd largest economy, is using accounting methods usually used by small local businesses. 

    For the educated eye, this is like watching a spectacular slow motion train wreck. 

    Noobied by 18drawt
  • You think like a westerner, in Japan, if you ignore a problem there is no problem. And if someone finds out a scapegoat is chosen and everything continuous just as before.
  • Nah, it's not thinking like a westerner, it's thinking at all. I see western countries doing the same shit.

    Of course when it all comes crashing down a scapegoat will be found, and morons will believe it. But it won't continue just as before. Japan's role in Asia and the world won't continue, and the massive social change that must follow also means Japan as we know it won't continue.

    But the mood of most people is defeatism. You can't change anything so just give it up. Fuck that self-indulgent nihilism and cowardice.

    edit: Japan has kidney for sale to help pay off loan sharks.