The Global House of Cards Are Starting to Crumble: The Fed Looks To Exit Easy Money, Chinese Data Fails To Impress, And Japan And The Yen Are Hitting The Concrete Wall BIG TIME!!!
May 13th, 2013
The Nikkei 225 has gone up like 40% since JANUARY!.
Money is flowing out of the bond market.
The Yen has devalued 25% this year.
25% devaluation when the year is almost halfway over is pointing towards something. I wonder if we will see more of this same trend, only growing exponentially faster.
In Weimar Germany, the stock market was one of the first refuges as people exited cash and bonds.
Let’s put it this way, if you owned Japanese Government Bonds on Thursday last week, (let’s say the 10-year bond for argument’s sake) you’re now ~25% poorer.
For a supposedly ‘risk free’ investment – the Japan government holds the printing press so will never default– this is a huge loss.
Big insurance companies and pension funds are running like hell. They have TRILLIONS of these bonds and they’re losing value. They are dumping cash into the only assets they know hold some value in a currency crisis.
JGB Futures Halted (Again) For Biggest 2-Day Plunge Since Lehman; 5Y Yields Hit 13 Month Highs