Japan Continues To Kill The Yen, Wall Street Surges

Elaine Meinel Supkis

For the last five months, every time it looks like Japan will have to finally start inflating along with all the other industrial nations, the Bank of Japan finds a new way to stop it and continue as is. So the carry trade resumes as the yen resumes falling and the dollar is not far behind. But I look at the actual statistics of Japan and see clearly it is a vicious game they are playing because it is making them very rich. And the stocks of Japanese industrial exporters shot up on this news. They feel this game isn't done quite yet. The Federal Reserve will keep interest rates 5% higher than Japan. This is supposed to be good news.

From Bloomberg:

The yen fell from a two-week high against the dollar and euro on speculation investors resumed sales of the currency in search of higher returns elsewhere through so-called carry trades.

Japan's yen snapped a three-day winning streak, declining against 14 of the 16 most-active currencies after U.S. stocks gained yesterday after three days of losses. The yen dropped the most against New Zealand's dollar, where an 8 percent benchmark interest rate compares with Japan's 0.5 percent, the lowest among major economies.

``The yen is heading south,'' said Satoshi Okagawa, head of the foreign-exchange forward trading group at Sumitomo Mitsui Banking Corp. in Tokyo. ``Concern over stocks is dwindling and investor risk appetite is coming back.'

OK, was the yen 'winning' when it was inching up in value? No? Heh. My cartoons showing Miz Japan's wild attempts at killing the yen are the correct image to hold. Japan is addicted to a very weak yen and they have schemed along with America to keep the yen weak. The deal made a year and a half ago to weaken both the dollar and the yen rapidly is still in place. There was momentary fear from Japan but the US investing class pressured the Japanese and on top of this, the Japanese exporters laid on tremendous pressure to keep the staus quo going.

Up until four months ago, China complained about the fake Japanese 'depression' and demanded the West stop playing that stupid 'the yen is weak because Japan has no inflation' game and be honest. But then the number crunchers in China figured out the next step in this game and they are now grimly pursuing this angle which is, they take over control of not just the dollar but the yen, too.

If we go to the IMF and examine their charts that track the FOREX reserves of nations, we notice that Japan has a huge FOREX reserve of nearly a trillion dollars. It went down a tad last month ago but when the Chinese announced they passed the trillion mark, Japan began hoarding dollars again. I bet they were told by our government to not hoard dollars so the yen would get stronger? All these manipulations of the fiat currencies are top secret. The fact that all governments are manipulating currencies is top secret. They all deny this. Right.

The Japanese now hold $765 billion in foreign securities held in other nations. So let's go peek at this week's US FOREX reserves. This is a depressing activity. Will I tire, doing this? Like Syphyus pushing the same rhetorical point up the same delusional hill over and over again? Well, our stats are going down, not up. This should alarm us. The FOREX reserves ought to be some percentage of the money produced so if we have 5% inflation for several years, then it should be going up, just to keep it the same portion as before. But it isn't going up, it often wavers into going down.

We hold only $23 billion in foreign securities. The other day, I noticed that the US holds a lot of yens and euros but virtually no yuan. This was intresting in several ways but I haven't found enough evidence to figure out the mental thinking behind this business...yet. As I scan government sites, my eyes are open to clues.

From the Bloomberg article:

The yen remained lower after a government report today showed Japan's industrial production unexpectedly dropped for a third month in May, raising concern growth in the world's second- largest economy is slowing.

Production fell a seasonally adjusted 0.4 percent from a month earlier, the Ministry of Economy, Trade and Industry said in Tokyo today. The median estimate of 48 economists surveyed by Bloomberg News was for a 0.9 percent increase.

Everyone expected the stats in Japan to go up. Two days ago, I snagged a Nikkei headline that said production and buying has gone up. Then suddenly, its down. OK, what happened? Do government officials lie? Does the sun rise in the east while the officials swear it is rising in the west? Of course.

Since they are lying and this is causing the United States to run an even worse trade deficit with Japan, we should see screaming officials demanding Japan raise the value of the yen or else we will put up barriers to trade, right?

From the US Treasury Economic Exchange Report:

The last 5 years, China's dollar holdings has gone up 283% but Japan's has also gone up 94% which means they doubled their holdings during their 'depression' that is so terrible, it makes most American economic pundits cry a river of tears for the poor Japanese who are assembling the world's second biggest pot of fiat gold! Let's visit the Japanese financial news service to see what is going on:

Asian Currencies On The Rise As Global Money Flows In

TOKYO (Nikkei)--Propelled by robust economic growth and ample investment funds flowing into the region, Asian currencies have appreciated significantly, with the South Korean won and the Thai baht at their highest levels against the yen since the 1997 currency crisis.

MARKET SCRAMBLE: REIT Correction To Be Over In A Flash

TOKYO (Nikkei)--The current correction affecting real estate investment trusts will be short-lived amid foreigners continuing to take advantage of interest rate differentials as well as anticipation that overseas funds will pursue mergers and acquisitions in the medium and long term.

According to today's Nikkei news, Japan's trade surplus is UP 28.7 % this year! My god. They run the world's biggest trade surplus on top of this. Unlike the US who falls further and further behind, the more we trade, Japan surges ahead! So how can this work? China's FOREX dollars have tripled in the last 5 years but Japan's has doubled! Korea, India and Malaysia have also doubled which is why the Japanese say OTHER Asian currencies have strengthened but Japan's statistics are IDENTICAL yet their poor little yen isn't keeping up with a plunging dollar, it falls faster. This is, of course, the supreme magic trick.

They were alarmed at this week's news and saw all the signs that they must raise the value of the yen so they waved the magic wand which is a club and smashed down the yen. Suddenly, the statistics for growth went from positive to negative IN ONE DAY. This is impossible.

I have proven that our Treasury and Federal Reserve lie about numbers, the most glaring are the cancellation of the M3 numbers and tinkering with the inflation data to hide inflation. The Japanese feel that if you can manipulate fiat currency, why not manipulate the data too! But any sane person looking into this can see they cannot be the only exception in the world to normal economic data!

Namely, they can't be one of the top nations accruing US dollars in a reserve which grew to the second biggest on earth, enjoy a rising foreign trade situation, have the biggest, by far, trade surplus with the world and not be a strong economy! What does it take?

This unique depression of theirs has not one sign of depression except one: the wages of the Japanese slave workers keeps falling while they are not allowed to make a penny in savings because the interest rates set by the government are nearly totally zero. They haven't seen 1% returns since 1994! This is 13 years of 'depression' which has grossly enriched the nation's elites, dominated the US trade in value-added goods, decimated the US industry and is now growing at a nearly 30% rate per year! WOW. The world hasn't seen such swift growth since Britain discovered capitalism or the US was the sole manufacturing and banking base after WWII!

So the fact remains: will anyone in power call on the Japanese to stop this nonsense? No?

So I look to China. The dragon's silence is loud. Not only have they accepted the idea of raising the value of the yuan, they are OK with Japan destroying our industrial base while driving us deep into debt as this flood of red ink we generate with them in trade returns to our shores in the form of debts to be loaded onto our companies here in the form of 'take overs'.

So let's review the communist Chinese plan for world domination: to have the capitalists competing with each other, to help them along in this struggle so they kill each other. China can't dispach the US militarily, like bin Laden's long-range plans which are working, by the way, the plan of the Chinese hatched back in the mid-1980's was to bankrupt us. They know they can militarily dominate Japan once the US Navy is sunk by Japanese currency manipulations.

China watched as the military fleets of Russia rusted when the communnists there went bankrupt, trying to hold their police state empire together. The US is just as over-extended as Russia was and our financial situation just as dire. So letting the Japanese destroy us plays into the long-range plans of China. On top of this, the weak yen is open for Chinese take-overs. I figure, the Japanese had a moment of fear about this but then saw it wasn't happening..yet...so they took the gamble to play this game further.

From Market Watch:

Asian indexes moved higher Thursday, with Japan rising on automakers such as Honda Motor Co. and Toyota Motor Corp. after an overnight rebound on Wall Street.

The actions of the Bank of Japan are short-sighted if they don't want to be face to face with a Dragon with a long memory and a lot of bones to pick. To please Honda and Toyota, the government of Japan decided to supress Japanese domestic sales and pump up exports which I assume will be 50% higher next year compared to this year! This should be stopped by the US but Paulson is Goldman Sachs and this means, he wants Wall Street to shoot up thanks to take overs paid out of the red ink from our trade and other financial goodies that are bad for our economy but good for Goldman.

American automakers have thrown in the towel. They can't hire Americans anymore and so they are buying off the old union members and shifting production to...China. Again, we see China benefitting from all this. They are still way cheaper than Japanese or American workers so BOTH competing nations are using China which means China is triangulating this business to increase the industrialization of their nation. They understand the concept of 'value added.' The scandals over Chinese cheap goods suits the government there who shuts down these things because in the long run, they actually drain the economy, not strengthen it.

The Chinese want to be the #1 producer of automobiles, jets, high quality instruments of various sorts, telecommunication devices, etc. Namely, all the really great stuff that makes a nation powerful. They want to control the things we need to survive so they can give us orders when they decide it is time to disarm us, especially our nuclear arms. This is also why they happily support our screams for disarmament. We want North Korea disarmed, they want us disarmed.

The international philosophical underpinnings of this are being laid and it is a trap. We are walking into many traps here. The movements taken by Japan are making China stronger and the US weaker and this is a signficant failure of Japanese strategic thinking. Too bad for them.

From Interfax, China:

China's total fiscal revenue reached RMB 2.17 trillion ($278.5 billion) in the first five months of 2007, state media reported today.

Central fiscal revenue, representing revenues directly collected by the central government, accounted for RMB 220.93 billion ($28.32 billion) of total national revenue. Local fiscal revenue, which accounts for revenues collected by local and provincial-level governments, accounted for RMB 951.43 billion ($12.20 billion) of the total, according state-run Xinhua news agency.

In 2006, China's national fiscal revenue amounted to RMB 3.94 trillion ($504.78 billion) while total financial expenditure reached RMB 4.04 trillion ($518.24 billion). During the year, central fiscal revenue reached RMB 2.12 trillion ($272.36 billion) and total central expenditure was RMB 2.35 trillion ($300.68 billion).

Like all the major nations, China runs its government in the red by a tad, $28 billion. The US numbers are cooked since our government has now openly mashed in the Social Security excess money into the general funds so it hides our deficits by about $100 billion a year but for 5 years, our deficits ran at well over $300 billion a year. This has slowed down only in the last year due to taxes pouring into the coffers but this is now ending as the US slides into a truly nasty recession.

From Interfax China:

China will open its spot market to individual investors for gold trading nationwide in July, a Shanghai Gold Exchange official told Interfax today.

SGE press official, Tong Gang, said that individual investors will be able to trade gold at a minimum trading volume of 100 grams through financial institutions that hold SGE membership.

"The official launch of spot gold trading for individual investors nationwide will be someday in July. However, the exact date is yet to be decided," Tong said.

The Chinese are a very insecure people. They have been through one hell after another for the last 200 years. I suspect the gold market there will be very, very popular. They will probably soak up all the gold which is several hundred tons, being dumped into the gold markets by Europe this year. Gold traders and gold bugs in America should be celebrating this news!

The fiat manipulators have mad a huge thing about how money doesn't need to be attached to gold. They point to the fine messes they are making and say, 'We can control things through interest rates alone,' and this is the basis of the monetarist School of Chicago's philosophy. And this is true only the Japanese clearly show the downside to this: they can outrageously manipulate the interest rates! And this is warping world trade in Japan's favor. And the US is adamantly refusing to stop this or counteract it which is a form of suicide but then, the clowns and traitors running our systems are just that: traitors and clowns! They don't care!

From Bloomberg:

Federal Reserve Chairman Ben S. Bernanke, who resisted calls for an interest-rate increase when prices climbed and brushed off arguments for a cut as growth slowed, can claim vindication as data on the economy reinforce his case for keeping rates just where they are.

Economists in a Bloomberg News survey unanimously predict that Bernanke and Fed policy makers will announce today that they are keeping the benchmark rate at 5.25 percent, where it has been for a year.

There is no inflation...there is no inflation...keep your eyes on the Japanese clock...there is no inflation...

Thank you, Bernanke. Why is he FIXATED on this stupid data while ignoring tons of other data? Why isn't he worried about the stuff I worry about? Why do traitors ignore obvious dangers? Well, they do this because they want their friends to get rich and then, like Wolfowitz or the Bush clan, move out of the country and go to Europe or South America. We are talking about $4 a gallon gas in the next 12 months! The price of milk is soaring! The price of meat and eggs, rising rapidly!

Half, 50%!--of Americans can't take a miserable vacation this year! And things are going just hunky dory. If things get nastier, Bernanke will play the monetary game and drop interest rates to goose the economy into gear even as inflation rages, right? Greenspan did this! Indeed, we are still living inside the Greenspan inflation caused by him dropping interest rates to 1% for nearly 2 years!

From Bloomberg:

The U.S. economy probably grew at an annual pace of 0.8 percent in the first quarter, the weakest in four years as housing slumped, economists said before a government report today.

The projected gain in gross domestic product compares with a preliminary estimate of 0.6 percent issued last month, revised figures from the Commerce Department may show. The forecast is based on the median estimate of 73 economists surveyed by Bloomberg News.

Gah. Our exports were dwarfed by our imports. And now we are definitely in a recession and if Bernanke drops interest rates, the dying dollar will totally expire except the Bank of Japan has decided to simply soak up all those useless dollars and so it goes: this path ends at the Chinese dragon's cave door.

From Market Watch:

An end isn't anywhere in sight to the meltdown in subprime mortgage markets, the chief investment officer at Los Angeles-based TCW Group Inc. warned a gathering of investment professionals on Wednesday.

Yesterday, the army of Pinnocchios working in the government and media all yelled that the subprime meltdown was DONE. Gone! All over. Saner folk can plainly see, it has barely begun. Stocks shot up yesterday when the magicians all over the media and the govnernment waved their wands in unison, chanting that the storm was past, all was well, there will be no more hedge fund failures and the failures will hammer only--!!!!!----pension funds and other public entities! Gads. Hang them all.

The magic worked...for one day. Will it work for a summer? Will grim reality set in when the leaves turn in October? This is usually the case. The Wall Street brokers shiver as the winter winds reminds them what happens to grasshoppers. And then they sell.

From Forbes:

Robbert Van Batenburg, head of research at Louis Capital Markets, recommends buying shares of New York-based auction house Sotheby's.

Van Batenburg believes that analysts are underestimating the company's financial performance and that when Sotheby's (nyse: BID - news - people ) reports results for the current quarter on Aug. 2, earnings will come in substantially above what has been forecast.

The last big blow-out party the rich elites held in 1929 was the annual Halloween bash which was frantic as they tried to pretend the Roaring Twenties was still a lion and not roadkill. So it is here: we see them frantically bidding against each other as they hope these things they are snagging will always rise in value and be 'investments' rather than 'white elephants.'

One trick they use is very obvious: they 'donate' these things to 'museums' and then take a big tax write-off which protects their investments and businesses when they die or have difficulties. Note how the number of museums are rising rapidly! The Hirschorn or the Getty, they are springing up like mushrooms and every one of them is a tax dodge.

Which reminds me, our government is running in the red and has done this for much of my life. This is bad.

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Comments

[teddy]

If the yen is heading south, then the Bank of Japan will have to create a massive amount of money out of thin air and then send out huge fleets of Kamikaze squadrons to deposit the money into the hands of the secret hedge funds. These actions hurt the majority of the people in Japan and the US and help only the elite in this country who hold long term debt instruments and equities and those in Japan who control the manufacturing giants. This will lead to more inflation in Japan if the sterilization process continues to become more difficult. And the Chinese elite are ready to print money to buy up more of our questionable debt and add to worldwide inflation and hurt about half of their people who see no wage increases, the insanity of it all. No wonder Congress has an approval rating of 18% and that of Bush only 23%. How long will the American people put up with flat wages while the price of stuff goes up around 10% thus creating profits for Wall Street?

[John]

How long will the American people put up with flat wages while the price of stuff goes up around 10% thus creating profits for Wall Street?

Now you understand the purpose of the SECOND Amendment: revolution.

Unfortunately, humans being what they are, it won't actually start until after the economy has collapsed from all these preditory machinations.

[CK]

Capital is fungible; human capital is also.
As Americans get funged, it is reported that the average life expectancy in Shanghai has just reached 80.97 years. When I was younger, human capital was understood to mean the learning, education, and attainments that the individual has invested in. The foregoing of immediate gratification for larger and longer gratifications a few years down the road. Now human capital just means human beings.

[Elaine Meinel Supkis]

If things are good, the Chinese live for a very long time even if they smoke. Their culture used to venerate the old and is moving back to that again.

As I age, I see the utility of that. Heh. When I am 90, people better venerate me or else.

[Forex Tracer]

Thanks for the post mate.

[Cheap New Era Hats]

thanks nice post,and thanks sharing!!!!

[Jimmy Choo Chaussures]

I also follow through Google Reader!