{"id":21238,"date":"2016-06-25T06:47:28","date_gmt":"2016-06-25T11:47:28","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21238"},"modified":"2016-06-25T06:47:28","modified_gmt":"2016-06-25T11:47:28","slug":"going-going-gone-the-eu-begins-to-splinter","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21238","title":{"rendered":"Going\u2026 Going\u2026 Gone! The EU Begins to Splinter"},"content":{"rendered":"
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Going\u2026 Going\u2026 Gone! The EU Begins to Splinter\u00a0<\/a><\/h3>\n<\/div>\n
Dark Social Mood Tsunami Washes Ashore\u00a0<\/strong><\/div>\n
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Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers \u2013 if memory serves, the biggest nominal intra-day gain ever recorded (with the possible exception of one or two days in early 1980). Here is a picture of Haruhiko Kuroda in front of his Bloomberg monitor this morning:<\/p>\n

\"kurodaThis can\u2019t be happening\u2026 please\u2026 let me wake up and realize that it was all just a bad dream\u2026<\/p>\n

Photo credit: Reuters<\/p>\n

The\u00a0War Street Journal\u00a0<\/em>immediately exhorted the poor man to \u201cgo big or go home<\/a>\u201d \u2013 in an article brimming with the usual Keynesian central planning clap-trap (we need more inflation, a strong currency is \u201cbad\u201d, rev up the printing presses, yada-yada\u2026)<\/p>\n

Touching less than 99 yen\u00a0to the dollar, this brings Japan\u2019s currency back to where it started just as Abenomics was ramping up in 2013. With interest rates already negative, a weak currency is one of the few tools Japan has at its disposal.\u00a0A strong currency will be devastating for efforts to engineer inflation. Japan will need to prepare a response.\u00a0<\/em><\/strong><\/p>\n

[\u2026]<\/p>\n

Bank of Japan Gov. Haruhiko Kuroda will be under pressure to go deeper on negative rates, even though doing so in the first place,\u00a0in January, has seen the yen strengthen, not weaken.<\/strong><\/p>\n

[ed. note: yes, do more of what hasn\u2019t worked! This is also straight from the Keynesian playbook\u2026]<\/em><\/strong><\/p>\n

[\u2026]<\/p>\n

If negative rates aren\u2019t the answer, what is? Increasing asset purchases of bonds and exchange-traded funds are an option, but there is limited room to expand those programs and the effect, only marginal at this point.\u00a0Mr. Kuroda has been dismissive of more aggressive\u00a0helicopter money-like moves\u00a0that toe into fiscal policy.\u00a0<\/strong><\/p>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Going\u2026 Going\u2026 Gone! The EU Begins to Splinter\u00a0 Dark Social Mood Tsunami Washes Ashore\u00a0 Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers \u2013 if memory […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[5728,83,5582,279,284,374,2854,452,572,6170,1478],"class_list":["post-21238","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-acting-man","tag-bloomberg","tag-brexit","tag-eu","tag-european-union","tag-gold","tag-haruhiko-kuroda","tag-japan","tag-nikkei","tag-pater-tenebrarum","tag-yen"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21238","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21238"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21238\/revisions"}],"predecessor-version":[{"id":21239,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21238\/revisions\/21239"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}