Bank of Japan

[Guest]

going negative interest rates. I think there is a shit storm brewing and its going to get ugly

[ajl]

With an elderly population and the highest per capita debt in the world, Japan will sink. Not if but when. This just advertises that the end is near.

[Guest]

wait it could be happening here in 2016.

[cottonpicken]

Its been called the widow maker trade for a decade for a reason,not that it won't happen its just real old news.

[hobbyfrmr]

some japanese citizens must have money. If negative interest, there should be a run on banks, or a mass exodus of money to other countries where there is a sliver of interest being offered.
Will this be the next big announcement?

[farming101]

As crazy as it sounds many depositors will likely be willing
to pay a small amount for the convenience of having money
on deposit.

[errolanderson]

26 global central bankers are now cutting rates. The U.S. Fed is the only central bank intent on raising them.

This interview (below) just amplifies the confusion amoung highly schooled Harvard economists not on 'how to keep the ship from sinking', but rather, on 'how quickly the ship will sink'.

Today, the Dow Jones soared more than 300 points due to the Japanese rate cut and a dismal U.S. 4th quarter GDP estimate of just 0.7%. Insane economics at its best . . . .

http://www.marketwatch.com/story/feldstein-says-fed-should-let-the-market-fall-and-keep-hiking-rates-2016-01-27?dist=tcountdown

[perfecho]

The negative rates are only for the banks, correct?
Where can I get some...;-)

[cottonpicken]

Another factor not talked about is velocity of money. Errol and I talk about it once in a while but it's hard to see main stream pundits touch on it.

I believe it may be the key to why we haven't hit run away inflation.

The money isn't moving around in the economy the way it should so the inflationary growth the central planners want is simply not happening.

The simple fact rates are going negative and nobody is screaming holy ****in shit buckle up we are going to hit the ditch is beyond me. I guess I'll never understand why so few see such obvious warning signs and most walk around thinking everything is sunshine and rainbows.

[perfecho]

I have been shaking my head, not understanding for a long time...always thinking the "ditch" was just around the corner., but somehow "they" just keep putting it off..... wondering if the ditch is getting deeper....or is the crew filling it in with shovels.....
Seems the rules and help have mostly benefited equities...too much power there.

[cottonpicken]

If Japan's rates move up less then two percent which they will when they have to externally fund and the swaps move against them 100% of government tax revenues go to debt servicing. And this isn't Greece this is Japan

The medicine we need to take would probably kill us the Greeks where talking about this stuff thousands of years ago. I hope I'm wrong but the laws of physics and nature keep being on my side.

No such thing as a free lunch

[errolanderson]

The global currency war of 'stimulus' called by central bankers is heating up.

Globally, we are at the end of a 80 plus year capitalistic cycle that has been prolonged through artificial central bank intervention. This cycle is about to be refreshed because central banks are now becoming powerless, especially the U.S. Fed and the ECB.

The U.S. continues to pretend their are an island within the global economy despite their gov't debt more than doubling over the past 8 years. The U.S. Fed is about to get a lesson in global economics as the U.S. plunges into a serious recession later this year.

[Hopalong]

Errol,a bit confusing that US central bank did the opposite of stimulus by raising interest rate and hearing that attempts and activities to stimulate economies are what got us into present situation of ineffectiveness.
Where did it all go wrong?

[Hopalong]

Was it the start of Keynesian economics about eighty years ago?

[errolanderson]

Irresponsible government spending and kicking-the-can strategies by central bankers living for the next day is responsible for this mess. Then stir in the fraud on Wall Street.

2016 to 2018 will be an interesting period of economic history . . . .