New Zealand Opens New Front in Currency War!

Hayman’s Kyle Bass: Mammoth Japan Stimulus Still Not Enough!

• Mammoth Japan Stimulus Still Not Enough: Hayman’s Bass! 
  by Matt Twomey, http://www.cnbc.com/ 
  The gargantuan stimulus Japan is pumping into its economy will have to be even larger to achieve the desired results, said Hayman Capital founder Kyle Bass. 
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  “They’re going to have to make the plan even bigger than they said if they’re going to successfully contain rates,” Bass told CNBC’s “Squawk on the Street.”
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  The reason is the “rational investor paradox,” said the hedge fund honcho who has been outspoken in his criticism of Japan’s fiscal policies. “If Bank of Japan investors believe in Abenomics and (BOJ Gov. Haruhiko) Kuroda’s plan to double the monetary base in the next couple years and generate some inflation and growth, then a rational investor who holds their bonds is likely to sell a portion if not all of them,” Bass said.
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  (Read More: Bank of Japan Policy Is Huge, Risky Experiment: Fund Manager)
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  Bass said he saw it first-hand. “After being in Japan last week, I think that many investors are believing that the BOJ will be at least partially successful in generating some growth—so the rational investor will sell some bonds,” he said. “There’s a quadrillion yen in bonds out there. If 5 percent of them get sold, that’s 50 trillion yen. So it doesn’t look to me like the plan is big enough.” According to a plan announced April 4, the Bank of Japan will buy 60 trillion yen ($590 billion) in bonds both this year and next.
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Jim Rickards: Japan’s Taking the World Down With Them!

A New Global Currency, the Rise of the East and Peak Oil !

• A new global currency; the rise of the East; and peak oil ! 
  by http://www.goldmoney.com/
  Episode 126: Alasdair Macleod interviews Erik Townsend – a specialist on “peak oil investing” and a contributor to the popular Financial Sense website.
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  Erik sees short-term strength in the dollar due to capital flight out of other markets. But long term, America’s problems will mount, and the country will need to address serious issues. This could result in the relatively-peaceful emergence of a new global currency system, but whether the central planners could avoid an inflationary collapse prior to such an event is questionable.
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  Both men muse on the reactions to the latest Fed comments, and how quickly markets react to perceptions of the stimulus “punch bowl” being withdrawn. Erik sees a gradual long-term movement of wealth from West to East.  The power games that surround this historical dynamic will affect the commodities market in intriguing ways. The duo finish off with discussion of the energy section – one of Erik’s speciality subjects.
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  This podcast was recorded on 23 May 2013.

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As the Market Panic Demonstrates, Central Banks are Stuck on a Treadmill of Money Printing!

• As the market panic demonstrates, central banks are stuck on a treadmill of money printing ! 
  by Jeremy Warner, http://www.telegraph.co.uk/
  Oh what a tangled web central bankers weave when they practice to deceive… Last night’s panic in Tokyo, where the Nikkei dropped a stomach churning 7 per cent, demonstrates just how difficult it’s going to be for the world’s central banks to exit their loose money policies.
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  It’s not even as if Ben Bernanke, chairman of the Fed, said he was planning to exit; in fact, initially he said the reverse in testimony to Congress. It was only in the Q & A, and in minutes to the last meeting of the Fed’s Open Markets Committee, that a clear bias emerged to slow the pace of asset purchases “in the next few meetings”, so long as the economic data was strong enough.
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  What the subsequent violent gyrations in markets indicate is that any hint of applying the brakes risks generating a fresh financial crisis, which in turn would render the economic recovery still born. Both financial markets and the real economy have become addicted to “quantitative easing”, such that they can’t do without it.
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  The upshot is that we are going to see financial repression of the type being practiced in virtually all the major advanced economies – including, if only to a more limited extent, the eurozone – continue out into the indefinite future.
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Who owns the world reserve currency, the dollar, the global monetary hegemony? Look at the Satanic capstone on your dollar bill. The Luciferian New World Order will be complete with the arrival of the Satanic capstone: the Anti-Christ, fake messiah, bringer of false peace, the white horseman of Revelation 6!

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Even the Slightest Whiff that QE will Slow will Cause an Outright Panic and Implosion!

• All the talk about the FedRes ending or slowing QE is propaganda BS! The global economy and financial system will implode! I do not believe they are ready to pull the plug just yet! But it is coming! The Illuminist plan is global economic, financial and currency collapse; and the Satanic World War 3!
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• A “Whiff” is all That is Needed!
  by Bill Holter, http://blog.milesfranklin.com/
  Bernanke signals Fed to maintain stimulus efforts
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  This link was headlined on the Drudge Report as “Fed chairman warns ending stimulus would carry substantial risks.”  Well no kidding!  As I’ve written many times, “No more QE…no more system,” period.  Who would step in and purchase $1 trillion+ of Treasury securities that the Fed is currently buying?  And if they did find buyers (doubtful), how high would the yields need to be to attract the buyers?  …and of course the next question would be, are those rates too high and at levels that take up more in interest expense than the Treasury even takes in?
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  Ben Bernanke testified yesterday before Congress and spoke about the “tapering” of QE.  We have also been offered a trial balloon(s) over the last few weeks regarding cutting back on QE.  The results (even though nothing has been shaved back)?  Japanese treasury securities are now over 1% and U.S. Treasuries are over 2%.  The Japanese Nikkei average ended last night down over 7% after opening up 3%…can you say “reversal day?”  Stock markets all over the globe are down over 2% (except of course the free markets in the U.S.).  It is important to understand that these dislocations have taken place strictly based on the “THOUGHT” of lesser quantitative easing.
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  Before I write any further, I’d like to go back to basics and remind you exactly what “QE” is.  QE is “code” for outright monetization.  It is highfalutin gobbledygook speak for plain old fashioned PRINTING.  “Printing” to purchase Treasury securities that no one else neither wants nor would purchase.  Pure printing to be used to buy “stuff.”  “Stuff” as in assets that need “help” to keep their prices high so that the message that “all is well” continues to ring throughout the realm.  Pure and unadulterated printing that is used to paint the pretty (false) pictures so the populace will continue to sleep in oblivion.
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  The point is this, even the slightest whiff that the monetization will slow (forget about actually stop) will cause an outright panic and implosion of asset values as EVERYONE tries to be the “first one out.”  Think of it this way, in any Ponzi scheme wouldn’t you be an immediate “seller” if you knew that no more sucker money (or even just less money) was going to enter the scheme?  And this, in a nutshell is THE problem!  Without the infusion of new money, current asset values are not and cannot be justified in any world that we know of.
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Kyle Bass Bets on Full-Blown Japan Crisis!

• Kyle Bass Bets on Full-Blown Japan Crisis! 
  by Dan McCrum, Financial Times, via http://www.cnbc.com/ 
  Kyle Bass hopes he is wrong, and so may everyone else, as the danger predicted by the founder of Dallas-based Hayman Capital is nothing less than a full blown financial crisis in the world’s third-largest economy, Japan.
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  While the hedge-fund trade of the year has been to short the yen and buy Japanese stocks placed for an export boom, Mr. Bass sees in “Abenomics” – stimulus from Japan’s new prime minister Shinzo Abe – signs of stress that he has been predicting for three years.
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  The length of that call might see him labelled as just another bear pushing a tired case. Shorting Japanese bonds has been the “widow-maker” trade for a decade: as interest rates moved ever lower it destroyed investors betting on a rise.
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  Mr. Bass, though, predicts more than higher yields: “They will have a bond crisis in the next couple of years. A bond crisis doesn’t mean spread widening. It means they lose control of rates and their currency.”
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  (Read More: Volatile Bond Markets Puts Bank of Japan in Spin)
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  Yet Mr. Bass is no kook or perma bear, the investing equivalent of a stopped clock. He has form as one of the select group who predicted and profited from the housing crash in 2007. According to investors, his $1.5 billion hedge fund has averaged after-fee returns of 25 percent a year since 2006.
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  He is also mostly long, investing in securitized credit, and such things as bank loans issued by SuperMedia, a legacy Yellow Pages-style business.
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  He demurs on the details of his Japan bets, but the suggestion is option positions that, like those on pre-crisis mortgage-backed securities, trade at the wrong price. Mr. Bass says: “What’s funny is that we’re pricing optionality on the risk-free rate using the risk-free rate as an input. So, basically, the outcome of that formula at secular turning points is just wrong.”
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  For Japan, that turning point is approaching, and to explain why he turns to Bernard Madoff, the U.S. mega-fraudster. “As long as you have more people entering than exiting, you can maintain any kind of fraud, lie, or non-payment of obligations.”
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Richard Koo (Nomura) Warns Of “Beginning Of The End” For Japanese Economy!

Is the collapsing Yen the solution to Japan’s economic problems? I don’t think so!

• Richard Koo Warns Of “Beginning Of The End” For Japanese Economy! 
  by Tyler Durden, www.zerohedge.com
  The surge in Japanese long-term interest rates is likely causing some lost sleep among bond market participants and policymakers (despite their ignorance of the moves in the BoJ minutes) as Nomura’s Richard Koo notes, if this trend continues (now added to by the collapse in stock prices) it could well mark the “beginning of the end” for the Japanese economy.
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  Although the stock market has (until now) welcomed the yen’s continued slide against the dollar, Koo warns that this trend needs to be carefully monitored, as simultaneous declines in JGBs and the yen can be interpreted as a loss of faith in the Japanese government and the Bank of Japan. The biggest concerns are that the extreme volatility in Japanese stocks and bonds is occurring at a time when the BOJ was buying large quantities of government bonds.
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  Until the recent events there was an expectation in the JGB market that bond prices would not fall substantially even if the Bank’s aggressive easing program depressed the yen and lifted inflation expectations as long as the BOJ remained a major buyer. It is now clear that even large-scale BOJ purchases of JGBs cannot stop yields from rising.
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  Via Richard Koo, Nomura, The lies are working (too well)…
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What’s Fueling The Stock Market?

• US money supply is surging once again! It is the setup for inflation –> hyperinflation!
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• What’s Fueling The Stock Market?
  by http://truthingold.blogspot.ca/ 
  (Hint: It isn’t fundamentals)
  The run-up in the stock market  (the SPX for purposes of this article) has been nothing short of  stunning. Since hitting a sell-off bottom on October 4, 2011, the SPX  has run-up a nearly non-stop 47.8%. In just the last month, the SPX has  run up 7.5%. This is in the face of deteriorating economic indicators  and declining corporate revenues. The stock market has for sure taken  most observers and professionals by surprise, except for maybe the most  passionate “perma-bulls.”
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  Given this incredible move higher in  stocks, I wanted to investigate a couple of possibilities for what is  fueling this near-parabolic stock rally. Based on what I’ve been able to come up with, it’s pretty clear that stocks are rocketing higher on Fed fuel and not fundamentals. But don’t take it from me, it seems that  some high profile billionaire investors are unloading their big  positions, especially anything related to consumption:  Billionaires Are Dumping Stocks.  Let’s take a look “under the hood” of the economic and financial system and see if we can figure out why.
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  While Bernanke was giving his report on the economy and monetary policy to  the Joint Economic Committee of Congress today, in which he pretty much  laid to rest any fears that the Fed would “taper” its monetary policy  and bond purchase program anytime soon, I decided to look into some of  the Fed’s monetary data as reported on the  St. Louis Fed website.  Specifically I wanted to look at the Adjusted Monetary Base, which is  the sum of the currency in circulation plus the commercial bank reserves held at the Fed, because this monetary account is the one directly  affected by the QE program.
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  Here’s the most current snap-shot of the Monetary Base going to back to 1984, when the data-series began: (top of post)
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  Close to $2.8 trillion in money has been printed and used to purchase assets  from the banking system, ranging from highly distressed toxic waste to  short-term Treasury notes. Next I decided to “blow up” the chart  above and look at just the last twelve months and compare it to the same time period for a chart of the S&P 500:
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The Coming Collapse Of The Petrodollar System!

• The Coming Collapse Of The Petrodollar System! 
  by Andrew McKillop, http://www.zerohedge.com/ 
  PETRODOLLAR WAR
  The theory of Petrodollar Warfare can be attributed to US analyst and author William R Clarke, and his 2005 book of that title which interpreted the US-UK decision to invade Iraq in 2003. He called this an “oil currency war”, but the concept of the petrodollar system and petrodollar recyling dates back to the eve of the first Oil Shock in 1973-1974. The role of the petrodollar system as a driving force of US foreign policy is explained by analysts and historians as basic to maintaining the dollar’s status as the world’s dominant reserve currency – and the currency in which oil is priced.
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  The term “petrodollar warfare” as used by William R. Clark says that major international war, legal or not, was seen as justified to protect the petrodollar system. Over and above the loss of human life, the combined costs of the Afghan and Iraq wars for the US are controversial like the interpretation of these wars as “oil wars”, but analysts like Joseph Stiglitz and Linda Bilmes put the total combined war cost at above $4 trillion. This can be compared with – and totally dwarfs – the annual cost of US oil imports, which are now sharply declining on a year-in year-out basis as domestic shale oil output ramps up, and US oil demand stagnates.
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  Clarke’s theory, like the explanation of the role and power of the “petrodollar system” depends on two basic drivers. Most major developed countries rely on oil imports, which are purchased using dollars, so they are forced to hold large stockpiles of dollars in order to continue importing oil. In turn this also creates consistent demand for dollars, and prevents the dollar from losing its relative international monetary value, regardless of what happens to the US economy.
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Gold, Silver & 100-Year Inflection Point To Crush The West !

Storms ahead !

• Gold, Silver & 100-Year Inflection Point To Crush The West! 
  by www.kingworldnews.com
  On the heels of the Fed’s James Bullard saying the central bank should continue its bond buying program, today acclaimed money manager Stephen Leeb spoke with King World News about what he described as a key 100-year inflection point.  Leeb also discussed gold and silver.  Below is what Leeb had to say in his interview.
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  Leeb:  “In addition to being focused on the gyrations in the gold and silver market and whether we have now successfully tested a bottom, the bigger picture is that the world remains a mess.  Yes, eventually all of the money that is floating out there is going to lead to inflation, but there are also a great many other problems that governments around the globe will have to contend with.
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  Clearly Europe is not out of trouble.  Spain, as an example, is literally ruling with fear.  Their government is staying in power by virtue of fear.  The public is scared that if they drop out of the euro all hell will break loose.  That’s what the government is telling them.  I don’t think the government of Spain can keep the populace at bay using fear for much longer….
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Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever!

• Thanks To QE Bernanke Has Injected Foreign Banks With Over $1 Trillion In Cash For First Time Ever! 
  by Tyler Durden, www.zerohedge.com
  Two years ago, Zero Hedge first made the observation that the bulk of Fed reserves (also known simply as “cash created out of thin air” because money is first and foremost fungible no matter what textbook theoreticians may claim, and the only cash allocation preference is the capital allocation IRR analysis) had been parked not with US banks, but with foreign banks with US-based operations. We followed that with more analyses, showing explicitly how the Fed was providing a constant cash injection to foreign banks courtesy of the rate on overnight reserves which is the amount Fed pays to banks that hold reserves with it, as the bulk of reserves continued to end up with foreign banks – a situation set to become a huge political storm some time in 2014-2015 when the IOER has to rise and the Fed is “found” to have injected tens of billions of “interest” not into US banks but in foreign banks operating in the US, and which then can upstream the “profits” to insolvent offshore domiciled holding companies.
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  So it was our expectation that while if not slowing down its rate of money-creation (i.e., reserve-production) – something that won’t happen for a long time as it would crash the stock market – the Fed’s reserves would at least revert to being accumulated at US-based banks. No such luck. In fact as the latest H.8 report demonstrates, as of the most recently weekly data, the Fed’s policies have led to foreign banks operating in the US holding an all time high amount of reserves, surpassing $1 trillion for the first time, or $1,033 billion to be precise.
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  This means that, as we expected several months ago, the only recipient of ongoing Fed money printing are not US banks, but foreign banks operating in the US. For those confused about the big picture, here is a chart showing the breakdown of cash held by big and small US banks as well as foreign banks, superimposed to total reserves created by the Fed since the start of the Great Financial Crisis. The correlation is 100%.
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  And just to prove that ALL the unsterilized cash from both QE2 and QEternity has essentially gone to support offshore banks, here is the conclusive chart showing the change in Fed reserves and cash held by foreign banks:
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Deepcaster: Biggest Bubble About to Burst !

It is coming soon!

• Deepcaster: Biggest Bubble About to Burst! 
  by Deepcaster, http://silverdoctors.com/ 
  “Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system.  The system remains still in the throes and aftershocks of the 2008 panic and the near-systemic collapse, and from the ongoing responses to same by the Federal Reserve and federal government.  Further panic is possible and hyperinflation is inevitable.   What continues to unfold in the systemic and economic crises is just an ongoing part of the 2008 turmoil.  All the extraordinary actions and interventions bought a little time, but they did not resolve the various crises.  That the crises continue can be seen in deteriorating economic activity and in the panicked actions by the Federal Reserve, where it proactively is monetizing U.S. Treasury debt at a pace suggestive of a Treasury that is unable to borrow otherwise. -John Williams, ShadowStats
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  It had to happen. And now it has begun. The very biggest bubble in financial history has begun to deflate. And over the next few months, we expect that deflation to accelerate and morph into a bursting.
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Jim Willie: Bank Run Happening in Bullion! Coming to a Climax with Gold at $7,000 per Ounce!

• Jim Willie: Bank Run Happening in Bullion! 
  by Greg Hunter’s USAWatchdog.com
  Jim Willie, Editor of The Hat Trick Letter, says the recent gold price take-down has caused, “A bank run in gold bullion banks.  It’s a vault run. . . . Wealthy investors are asking for their gold, and some are finding out it’s not there.”  Jim Willie, who holds a PhD in statistics, says things are getting worse.  Dr. Willie contends, “Back in 2011 and 2012, you had an important event every three of four months.  Now, it’s every two or three weeks.  So, the mean time between failures is rapidly declining.”  Dr. Willie goes on to predict, “Before, they were talking about stress tests.  Now, they realize that all of them in the past were a fraud.  So, they are talking about ‘bail-ins’ because they are expecting failures.”  Dr. Willie contends, “It’s all coming to a climax where gold is going to be central with a gold-trade central bank and gold priced at $7,000 per ounce.”  Join Greg Hunter as he goes One-on-One with Jim Willie of GoldenJackass.com.

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Forbes: Why the FedRes Fueled the Gold Fall !