The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.
Saturday, May 21, 2016
RISK OFF: The Last Leg Of The Monetary Stool Just Folded
Bolstering risk markets this past week was a counter-trend rally in the Dollar / Yen. However, late Friday, that reversed sharply on news that the BOJ is mulling its exit strategy...
"It's going to put some risk into the weekend unless we get a swift rebuttal from the BOJ."
Currency intervention is becoming a geopolitical hot topic - basically this red line: BOJ balance sheet (red) with USDJPY:
The issue is not the losses, since they could just write them off against their fake balance sheet. The issue is the mere contemplation of selling down of Japanese Government bonds back into the market place, or even just a cessation of buying.
"the United States issued a fresh warning to Japan against intervening in currency markets on Saturday, as the two countries' differences over foreign exchange overshadowed a Group of 7 finance leaders' gathering in the Asian nation."
"It's important that the G7 has an agreement not only to refrain from competitive devaluations, but to communicate so that we don't surprise each other," "Hence, the US - and thus global - position is that only if the USDJPY is plunging by a few thousand pips in any given day does the BOJ have permission to intervene"