More free money!
Always a good way to start the day as the BOJ drops another 140 TRILLION Yen of stimulus over the next two years. Last year I warned you that you will need to get used to saying "Quadrillion" the way International monetary policy is heading and it looks like Japan is likely to be the first nation that goes a full Quadrillion into debt trying to boost their economy. Not immediately but combine what they've got with what they promise and add a dash of inflation (and that's what the BOJ is TRYING to jump start – on purpose) and there you'll be – QUADRILLION.
The Nikkei has, as it should, gone absolutely nuts on this news and is up a very evil-looking 6.66% in eight hours (from 12,200 to 13,000) and that, of course, is a good line to short (/NKD futures) as we knew when they brought in Kuroda (and we knew last January, when I first started pointing out the Quadrillion Yen agenda) – and it was only 89 Yen to the Buck back then – today's little announcement has driven the Yen all the way over 95 (up is weaker), down 7% in a year.
China is FREAKING out about this – because devaluing currency is THEIR job and they have told the BOJ to cut it out or they'll start devaluing their own currency – the BOJ's response to this warning from China was this morning's announcement to double down on stimulus – so it's more than just islands in the Pacific Japan and China are going to be squaring off over in 2013.
Also helping the Yen fall this week is Fed speak from the bear camp with Williams yesterday and Lockhart this morning both saying QInfinity may, in fact be finite at some point. Of course this is just the normal noises from the Fed and later today we get doveish statements from Esther George at 12:30 and Janet Yellen at 5pm so all shall be well(ish) in Fed-land and that should weaken the Dollar (now 83.50 on Yen decline) and help the market and commodities.
Speaking of economies that need help – ha ha NYMEX traders and yay us as oil falls to $93.50 this morning. That's down a nice $3.30 from yesterday and good for $3,500 per contract on the /CL shorts and we only took 1/2 off the table on our USO's yesterday and we're still short SCO and XOM in our portfolios so YAY!!!! Yay for consumers too as gasoline plunges to $2.90 – all exactly as we've been predicting would happen after the holiday weekend for the last couple of weeks (since we went heavy on oil shorts again) but, sadly, this may be our last good one until perhaps after the Memorial day pump job.
As I mentioned yesterday (and the day before and the day before that – and last week), we've been shorting the market so yesterday's action was a big "wheeee!" for us and today we expect more of the same, despite the bouncy futures as nothing Fundamental has changed – the sheeple are merely so conditioned to buy the dips after a 6-month rally that they can't smell a reach change in the wind anymore.
As you can see from our Big Chart – the Russell only stopped falling yesterday because it hit critical support at 920 (the 15% line) but the Dow isn't nearly enough done falling if the steep drop in Global commodity prices is any indication of demand and not just plentiful supply (a little of both I think).
As Malthus failed to grasp 200 years ago – we simply get better and better at producing things every year and the really great thing about Capitalism is that it does tend to focus production in places where the greatest need exists and it's super-good at wringing every possible drop of oil, ounce of gold, pound of copper, ton of coal, etc. out of every discovered field or mine so it's very hard to have sustainable shortages – even with Global population up 6 times since Malthus warned us we didn't have enough to feed our second Billion. 6 Billion more people (and one Quadrilion Yen) and we do a better job of it today than we did in 1800 but still, of course, a lot of work needs to be done to even out the distribution – one of the major failings of Capitalism.
Anyway, we're having loads of fun redistributing the wealth from the NYMEX crooks to ourselves and that always puts me in a good mood. Another thing that puts me in a good mood is timing my post comments just right and just yesterday I said I don't trust any currency that doesn't work in a blackout and, less than 12 hours later, Bitcoin "service" is suspended INDEFINITELY after being hacked. I'm not expecting this to be the end for our plucky new virtual currency but it's exactly what I have been talking about.
Not even Cyprus had to suspend "service" of their currency. In fact, their currency was so valuable that they wouldn't give it back to people. You'll be happy to know, however, that not only is Madeline's WarCraft account still bursting with gold but she was even able to "mine" some yesterday by questing – so her fortunes are increasing while Bitcoin is suffering a bit of a setback – even though they sell mining equipment too.
All in good fun though – Bitcoin is still a very long way from printing a Quadrillion coins – even the most brazen hacker wouldn't be that crazy!
