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How Far Can The Yen Fall Before Japan Goes Bankrupt?

April 27, 2024

How Far Can The Yen Fall Before Japan Goes Bankrupt?

We may be about to find out

Japan’s ongoing march to national bankruptcy has been a recurring theme here. See:

Japan Is In That Box
Japan Takes Another Step Towards the Cliff
How a Country Goes Bankrupt, In 10 Steps

Now the death spiral has entered a new phase, with the yen/dollar exchange rate heading straight down:

To restate the “Japan collapse” thesis, soaring government debt will eventually cause the yen to crater and/or interest rates to spike. The Bank of Japan will then face an impossible choice: Support the yen with even higher interest rates and watch government interest expense rise to national bankruptcy levels. Or push interest rates down to keep a lid on debt costs and cause the yen to collapse.

As the above chart illustrates, the “cause the yen to collapse” part of the story seems to be happening. Interest rates, meanwhile, are now spiking in a mirror image of the yen’s collapse.

Decision Time

So it’s decision time for Japan’s leaders. What will they choose? And — more importantly — what happens when the global financial system realizes that it no longer matters?

Japan is a big country, so its impending crisis creates risks for the global economy. But it’s more important as a signal to the US, Europe, and China that we’re heading in exactly the same direction.

In other words, the Fed is in the same box as the Bank of Japan, and that box is shrinking with every new trillion dollars of debt.

Financial Strategist: “To Tie The Collapse To Some Date In September Is A Fool’s Errand”

September 14, 2015

Financial Strategist: “To Tie The Collapse To Some Date In September Is A Fool’s Errand”

There are scores of reports and analyses that peg a coming collapse of the economic, financial and monetary systems to the latter half of 2015. And while it is obvious that global stability is on borrowed time, analyst Craig Hemke of TF Metals Report isn’t completely convinced that we can effectively forecast such paradigm shifts the way we used to before the introduction of central bank intervention and rows upon rows of high frequency trading machines operated by Wall Street’s biggest banks.

In a recent interview posted by Future Money Trends Hemke argues that humans operating in free markets no longer carry the same influence as they did during previous events attributed to The Shemitah, Elliot Wave theory or Kondratieff waves:


(Watch at Youtube)

If you plot the U.S. Dollar versus Japanese Yen with a chart of S&P futures you can see them moving in exact one-to-one correlation… this gets back to those High Frequency Trading Machines and the ability of the central banks to influence the stock market by influencing a key factor that these HFT machines follow.

So if our markets now are not a human market… of human emotions and human economic cycles… if they’re not that anymore… then all of this stuff… the Shemitah, Kondratieff Waves, or all of the cycles and all of the Elliot Waves… you can throw it all out the window.

Because, that all relies to a great extent on human beings making decisions. What we’re seeing now is that all of these global markets are… they’re not flat out controlled because that means you’ve got central banks actually managing it tick-by-tick… But they are so utterly influenced by the central banks that are trying to purport this vision of normalcy to keep things going and they’re driven by these HFT machines, there’s no humans left.

…click on the above link to read the rest of the article…

 

 

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