Japan Enters Recession – Stocks At The Highs

It sounds completely and totally ridiculous doesn’t it?

Japan has now “officially” entered recession – last night posting it’s second straight quarter of negative GDP growth, while Japanese stock hang near 5 year highs.

You must see the hypocracy in it all.

You understand that Japan’s QE program has been “triple that of The U.S Fed” over the past year, and just last week was increased “even further” with The BOJ now buying 100% of newly issued bonds. Not just “a few of the bonds issued” – but every single one.

This literally equates to Japan sitting in their basement with some fancy printers and xerox machines and “point-blank” printing / counterfeiting Yen all day “every day”to pay off their debts. No different “in any capacity” to a petty criminal organization doing the exact same thing ( counterfeiting and passing artificial money ) – although obviously….risking years in the slammer.

If it where you or I – we’d be tracked down, handcuffed and whisked away to a maximum security federal prison – never to see the light of day again. You can’t just “print fake money”!

Now get this…..Japan raised it’s sales tax from 5% to 8% back in April, and there have been plans in the works to “further raise the sales tax” to 10% early next year! ( Although in light of the current economic disaster they “might” put this on hold). Can you see where I’m going with this?

If that doesn’t amount to “slavery” I don’t know what does.

Imagine yourself heading for the grocery store tomorrow, and seeing a 23% increase in the price of goods ( as your currency has been so dramatically devalued ) then “on top of that” and additional 3 to 5% increase in the tax!

Where you suddenly offered a 25% increase in your salary? Had you recently planted a small grove of “money trees” in your back yard just to stay afloat?

Where are all the new parks / bridges / roads and infrastructure that you “assume” your tax dollars go to ? Where are all the benefits to citizens ( as I know for a fact the people of a country such as Canada “expect” when taxes rise )?

How can the common man “not” see this as essentially being enslaved? You go to work for the same old pay, with rapidly devaluing currency in your hand – in an environment where taxes are going up!

You don’t work for yourself – you work for the bank!

There is no possible way the average person ( in an economic climate of “slowing global growth” ) stands a fighting chance. You used to live in a house, now you and your family live in a one bedroom apartment.

You used to eat the occasional bit of chicken or steak – but it’s “all rice” now.

QE is a complete and total disaster for the people of Japan, and unfortunately the same rings true for those of The United States.

Japan has thrown “everything but the kitchen sink” into devaluing their currency ( as The U.S is also attempting to do ) and has now “brilliantly” entered recession.

Get ready for “QE 4, 5 and 6” coming soon to The U.S – and get ready to start buying rice in bulk.

6 Responses

  1. David November 17, 2014 / 9:38 am

    The US market started slightly in the red but is now of course green and off to all time highs again. At which point should we all just say “If you can’t beat them, join them”? The market just will not go/stay down.

    If everything “goes fine”, the stock market goes up. If things “go bad”, QE4 around the corner, the stock market goes up. I just don’t see any scenario where the market will go/stay down for any prolonged period. 20 years from now we’ll probably still hear “Just buy the F’ing dip” and there will be bears missing out on decades of gains. Dow at 20,000 will soon be a great Buying opportunity (as opposed to Selling); we’ll be praying for dips back down to 20,000 so we can finally get long LOL.

    Frustrating for any bears who think Fundamentals matter, which they obviously don’t, at least not in our (trading) lifetime.

    • Forex Kong November 17, 2014 / 10:03 am

      The fundamentals will always come home to roost, but yes – it is extremely frustrating in the meantime.

      Keep in mind though…its not just “so easy” for bulls either as……with nearly 2 weeks trading flat as a pancake – you’d have to equally imagine them squirming here too.

  2. Michael Penthouse November 17, 2014 / 11:00 am

    Kong, you are so right and I welcome your choice of words: this is pure slavery. I seem to disagree on further QEs, though. Now after the elections the Republicans won’t support another round of QE and even question the existence of the FED. It is in their interest to tank the markets so they can regain the presidency next time.

  3. Dennis November 17, 2014 / 9:57 pm

    It seems no country is doing that well, but the US is still considered the best game in town, in spite of trade efforts to bypass the dollar.

    Fundamentals may still actually matter – it’s just they’re not very good anywhere.

    • Dress November 18, 2014 / 3:36 am

      Which means all stock markets should fall and the US the least. But instead we see all time highs as the global economy is slumping.

      • madness November 18, 2014 / 6:58 am

        Until CB’s stop uttering the words “QE”, expect risks markets to remain at all time highs. Expect to see even more desperate policies if current policies fail. Markets wont care about the long-term implications of these policies, they just care about “free money now”. They all believe they will be first out the door when it starts to go wrong.

        Part of the problem in the Western world is the general population. Many do not want to go through a severe economic hardship hence why they will let governments and CB’s try even the most madness of policies. As long as they are living some sort of normal life, they happy for future generations to pick up the financial tab.

        JPY is the key – as long as this keeps on weakening, expect to see markets being supported. If Abe loses the snap election he has called, then maybe we shall see an end to QE in Japan. But already he is mentioning giving money directly to the population. This will cause the countries debt to rise even more. Japan is facing Armageddon, what it needs to do will cause untold hardship for it’s population so instead, it’s trying to keep the population happy by destroying future generations. If JPy continues to weaken, we could see the start of a major currency war in the Far East.

        A continuously strengthening US$ is perhaps the catalyst for the next leg down in risk. Emerging markets have borrowed in cheap US$ to buy risk assets. If the US$ gets too high or if US starts to raise rates, they lose when they have to repatriate those funds or when they wish to roll over any positions. This is where the risk lies in my opinion. Don’t expect JPY to strengthen significantly any time soon unless Abe loses the snap election in December.

        As i said before, there are 101 reasons for risk to fall but until there is a real catalyst event, expect risk to keep grinding higher.

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