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[Japan cannot go bankrupt or default. It's operationally impossible. As long as Japanese debt is denominated in Yen, Japan can service and pay its debt. It can issue as many Yen as it needs to meet obligations.
Of course Japan can default. They decide one day that they don't want to pay back their debt, and voila! they've defaulted. It's very simple. Whether or not they want to is another question.
Why would they do that? They're not Greece or Spain where they ceded monetary sovereignty to the ECB. They have a central and a treasury, they can issue as much Yen as they need. Any default would have to be voluntary which I what I think you're suggesting.
His trades already are paying for him. I thought I read somewhere that you were in the bond market. If you are, sell long-dated JGB interest rate swaptions then. How can you go wrong?
Um, last time I checked, back in April, Bass bet big against JGBs (he probably chucked his clients money into that trade). JGBs have risen, with the yield collapsing on the 10Yr JGB down to 0.5% in April. Ouch. This is also a country with debt that's at 300% of GDP.
If he's shorting JGBs then he's a douche bag, and he's misleading investors. His entire thesis is based around a delusional debt collapse. That means an implosion in JGBs.
Yes, I'm a bond trader for UniCredit.
I can only assume that this is directed towards me, but only due to the fact that you enjoy singling me out.
As for Richard Sylla, that is his personal opinion I believe. Up until 1913, the United States has been off and on a Central Banking system and there have been crises on and off. I try to use international examples in my economical standpoints.
You had asked about economic volatility.
I agree with Kimura on Schiff. I've made A LOT of money on the long side of gold for many years, and IMHO, gold bugs will slaughter you on the downside because to them, gold is a religion and an ideology. I don't know Schiff but its my impression he is just another run of the mill gold bug.
I think much higher of Bass. I think he is ultimately right on his yen trade.
Of course Japan can default. They decide one day that they don't want to pay back their debt, and voila! they've defaulted. It's very simple. Whether or not they want to is another question.
Why would they do that? They're not Greece or Spain where they ceded monetary sovereignty to the ECB. They have a central and a treasury, they can issue as much Yen as they need. Any default would have to be voluntary which I what I think you're suggesting.
His trades already are paying for him. I thought I read somewhere that you were in the bond market. If you are, sell long-dated JGB interest rate swaptions then. How can you go wrong?
Um, last time I checked, back in April, Bass bet big against JGBs (he probably chucked his clients money into that trade). JGBs have risen, with the yield collapsing on the 10Yr JGB down to 0.5% in April. Ouch. This is also a country with debt that's at 300% of GDP.
If he's shorting JGBs then he's a douche bag, and he's misleading investors. His entire thesis is based around a delusional debt collapse. That means an implosion in JGBs.
Yes, I'm a bond trader for UniCredit.
I have former bond traders on my team.
His trade works even if there isn't a collapse, which he has articulated. Bass's trade is short the yen, long JGB long rates and long JGB vol, expressed entirely through long-dated options and swaptions that were purchased very, very cheaply off desks like yours. That trade is very much in the black. The only way it doesn't work is if there isn't any vol.
I never put a timeline on it. I know what is going to happen, I cannot tell you when it is going to happen and I never claim to know exactly when we will have hyperinflation. But I also say that hyperinflation is not guaranteed, it is a worse-case scenario. I say that if we keep doing what we are doing, we will eventually have hyperinflation. But I have also said that I do not think we are going to keep doing what we are doing. I think the spectre of hyperinflation once it looms large enough will force central banks to reverse policy.
OK, I admit to almost pulling the trigger here on my pre-packaged rant on hyperinflation predictions, but you clearly haven't drunk the Kool-Aid. Hyperinflation is a pretty rare phenomena, economic historians only agreeing on three clear cases in the last century (Germany 1923, Hungary 1946, Zimbabwe recently). As you put it, it is a "worse case scenario". I agree with Kimura's' "trifecta" that the pe-conditions make it impossible for to experience it in the foreseeable future. But high inflation short of hyperinflation could be devastating to the American economy, and that is very much possible. I don't want to quibble over words when I think we are in agreement on the substance.
I think we all are on regarding measuring inflation, I just note that independent efforts, like the Billion Price Index track CPI very closely and that for all the nitpicking, no alternative to CPI has eally emerged.
I'm puzzled by the comment on recent interest rates. There was a clear selloff after the Fed comments on QE, Where else do you see rising interest rates?
Why would they do that? They're not Greece or Spain where they ceded monetary sovereignty to the ECB. They have a central and a treasury, they can issue as much Yen as they need. Any default would have to be voluntary which I what I think you're suggesting.
Um, last time I checked, back in April, Bass bet big against JGBs (he probably chucked his clients money into that trade). JGBs have risen, with the yield collapsing on the 10Yr JGB down to 0.5% in April. Ouch. This is also a country with debt that's at 300% of GDP.
If he's shorting JGBs then he's a douche bag, and he's misleading investors. His entire thesis is based around a delusional debt collapse. That means an implosion in JGBs.
Yes, I'm a bond trader for UniCredit.
I have former bond traders on my team.
His trade works even if there isn't a collapse, which he has articulated. Bass's trade is short the yen, long JGB long rates and long JGB vol, expressed entirely through long-dated options and swaptions that were purchased very, very cheaply off desks like yours. That trade is very much in the black. The only way it doesn't work is if there isn't any vol.
Cool, bond traders are a varied bunch.
This thread has inspired me to start a blog.
Kyle Bass has been telling us that the Japanese market is going to implode for the last four years. He keeps betting against the Japanese bond market in a pathological fashion. He also like gold, no surprise. We should bookmark this thread.
I can only assume that this is directed towards me, but only due to the fact that you enjoy singling me out.
As for Richard Sylla, that is his personal opinion I believe. Up until 1913, the United States has been off and on a Central Banking system and there have been crises on and off. I try to use international examples in my economical standpoints.
You had asked about economic volatility.
I agree with Kimura on Schiff. I've made A LOT of money on the long side of gold for many years, and IMHO, gold bugs will slaughter you on the downside because to them, gold is a religion and an ideology. I don't know Schiff but its my impression he is just another run of the mill gold bug.
I think much higher of Bass. I think he is ultimately right on his yen trade.
Schiff has made money for his clients. He manages over 2,000 people, that's pretty good. His general benchmarks are on his own website and anyone can check them out. He has generally been right on his advice regarding Australia, China, Hong Kong, China, Foreign Stocks, Gold Mining Stocks and other emerging markets.
As for gold, he doesn't really suggest anyone make money off gold. All he has ever suggested that people buy it any hold on to it. Recommending that at least 10% of Gold be in your portfolio.
Do I know where the bottom is regarding Gold? No, I do not, but I'm still not selling mine.
As for Gold slaughtering portfolios on the downside and being a 'religion,' well that's your opinion. It's always easy to say how lousy an investment is 14 years after the fact when it finally has a correction.
You had asked about economic volatility.
I agree with Kimura on Schiff. I've made A LOT of money on the long side of gold for many years, and IMHO, gold bugs will slaughter you on the downside because to them, gold is a religion and an ideology. I don't know Schiff but its my impression he is just another run of the mill gold bug.
I think much higher of Bass. I think he is ultimately right on his yen trade.
Schiff has made money for his clients. He manages over 2,000 people, that's pretty good. His general benchmarks are on his own website and anyone can check them out. He has generally been right on his advice regarding Australia, China, Hong Kong, China, Foreign Stocks, Gold Mining Stocks and other emerging markets.
As for gold, he doesn't really suggest anyone make money off gold. All he has ever suggested that people buy it any hold on to it. Recommending that at least 10% of Gold be in your portfolio.
Do I know where the bottom is regarding Gold? No, I do not, but I'm still not selling mine.
As for Gold slaughtering portfolios on the downside and being a 'religion,' well that's your opinion. It's always easy to say how lousy an investment is 14 years after the fact when it finally has a correction.
Even I said back in 2007 that the deficit was too small to sustain the prevailing credit structure. I made money on the downturn/correction.
Where's my Fox interview? LOL.
Peter Schiff was calling for a housing crash since 2002. He's been wrong about EVERYTHING since his prophetic call.
Let's take a look:
1) Foreigners would decouple and sell Treasuries - Wrong
2) USD would crash and burn - Wrong
3) US economy would collapse - Wrong
4) 1 ounce of gold would equal the TOTAL value of the Dow Jones - Wrong <----my personal favorite.
5) Interest rates would skyrocket - Wrong
6) Hyperinflation - Wrong.
I have former bond traders on my team.
His trade works even if there isn't a collapse, which he has articulated. Bass's trade is short the yen, long JGB long rates and long JGB vol, expressed entirely through long-dated options and swaptions that were purchased very, very cheaply off desks like yours. That trade is very much in the black. The only way it doesn't work is if there isn't any vol.
Cool, bond traders are a varied bunch.
This thread has inspired me to start a blog.
Kyle Bass has been telling us that the Japanese market is going to implode for the last four years. He keeps betting against the Japanese bond market in a pathological fashion. He also like gold, no surprise. We should bookmark this thread.
Most threads are fun when you can gang up on the minority opinion.
Schiff has made money for his clients. He manages over 2,000 people, that's pretty good. His general benchmarks are on his own website and anyone can check them out. He has generally been right on his advice regarding Australia, China, Hong Kong, China, Foreign Stocks, Gold Mining Stocks and other emerging markets.
As for gold, he doesn't really suggest anyone make money off gold. All he has ever suggested that people buy it any hold on to it. Recommending that at least 10% of Gold be in your portfolio.
Do I know where the bottom is regarding Gold? No, I do not, but I'm still not selling mine.
As for Gold slaughtering portfolios on the downside and being a 'religion,' well that's your opinion. It's always easy to say how lousy an investment is 14 years after the fact when it finally has a correction.
Even I said back in 2007 that the deficit was too small to sustain the prevailing credit structure. I made money on the downturn/correction.
Where's my Fox interview? LOL.
Peter Schiff was calling for a housing crash since 2002. He's been wrong about EVERYTHING since his prophetic call.
Let's take a look:
1) Foreigners would decouple and sell Treasuries - Wrong
2) USD would crash and burn - Wrong
3) US economy would collapse - Wrong
4) 1 ounce of gold would equal the TOTAL value of the Dow Jones - Wrong <----my personal favorite.
5) Interest rates would skyrocket - Wrong
6) Hyperinflation - Wrong.
So you are giving economic predictions based on a 5 year time frame? Hm, okay...
What I have highlighted in Red is already in the process of happening or has already happened in some way, shape or form. The one highlighted in blue has already been explained and is not exactly a prophecy call, and you know it. Just because it hasn't come to full fruition doesn't mean that it can't happen and it doesn't mean that it isn't going to. Determining economic forecast on the here and now is a tad bit disingenuous.
Cool, bond traders are a varied bunch.
This thread has inspired me to start a blog.
Kyle Bass has been telling us that the Japanese market is going to implode for the last four years. He keeps betting against the Japanese bond market in a pathological fashion. He also like gold, no surprise. We should bookmark this thread.
Most threads are fun when you can gang up on the minority opinion.
By the way, on a side note, I don't understand this whole "devaluing" and "debasing" meme by the hard money crowd. The dollar doesn't have a baseline or base so to speak.
The Federal Reserve started to add reserves back in '08 when the Lehman Brothers shit storm surfaced. Reserve balances did skyrocket (not really important), settling at $3 trillion give or take.
The dollar still went up. Your charts are what raised my curiosity. Take a look at the Federal Reserves trade-weighted index. This tracks the dollar's exchange value against countries all over the world.
Here:
Actual URL click HERE
And what happened to the dollar? It went up. When When the FED started to take action the index was 95, it reached 99 in April, now it's over 100. Peter Schiff continues to parrot the debasing nonsense without someone correcting him on his bullshit.
Even I said back in 2007 that the deficit was too small to sustain the prevailing credit structure. I made money on the downturn/correction.
Where's my Fox interview? LOL.
Peter Schiff was calling for a housing crash since 2002. He's been wrong about EVERYTHING since his prophetic call.
Let's take a look:
1) Foreigners would decouple and sell Treasuries - Wrong
2) USD would crash and burn - Wrong
3) US economy would collapse - Wrong
4) 1 ounce of gold would equal the TOTAL value of the Dow Jones - Wrong <----my personal favorite.
5) Interest rates would skyrocket - Wrong
6) Hyperinflation - Wrong.
So you are giving economic predictions based on a 5 year time frame? Hm, okay...
What I have highlighted in Red is already in the process of happening or has already happened in some way, shape or form. The one highlighted in blue has already been explained and is not exactly a prophecy call, and you know it. Just because it hasn't come to full fruition doesn't mean that it can't happen and it doesn't mean that it isn't going to. Determining economic forecast on the here and now is a tad bit disingenuous.
He's been parroting the same thing for over 10 years. Seriously?
Most threads are fun when you can gang up on the minority opinion.
By the way, on a side note, I don't understand this whole "devaluing" and "debasing" meme by the hard money crowd. The dollar doesn't have a baseline or base so to speak.
The Federal Reserve started to add reserves back in '08 when the Lehman Brothers shit storm surfaced. Reserve balances did skyrocket (not really important), settling at $3 trillion give or take.
The dollar still went up. Your charts are what raised my curiosity. Take a look at the Federal Reserves trade-weighted index. This tracks the dollar's exchange value against countries all over the world.
Here:
Actual URL click HERE
And what happened to the dollar? It went up. When When the FED started to take action the index was 95, it reached 99 in April, now it's over 100. Peter Schiff continues to parrot the debasing nonsense without someone correcting him on his bullshit.
The trade-weighted dollar index generally goes up when it's strong against all the currencies it is weighted against, which are far more currencies than the average Dollar Index. There are plenty of currencies to consider, but I'm sure if I look through just a few, I can explain why the TW Dollar Index is rising. I doubt it has anything to do with any FOMC actions.
For example, the Dollar rose today based on news from the ECB regarding interest rates and how they are here to stay for a while.
Mostly every central bank in the world is competitively devaluing their currency, but they're doing it to prop you up.
So you are giving economic predictions based on a 5 year time frame? Hm, okay...
What I have highlighted in Red is already in the process of happening or has already happened in some way, shape or form. The one highlighted in blue has already been explained and is not exactly a prophecy call, and you know it. Just because it hasn't come to full fruition doesn't mean that it can't happen and it doesn't mean that it isn't going to. Determining economic forecast on the here and now is a tad bit disingenuous.
He's been parroting the same thing for over 10 years. Seriously?
I am assuming those were his new predictions after what happened during 2008. Seeing some of his speeches, I know some of those predictions are in reference to the 2008 financial crisis.
) knows him from the conference circuit. He used to work in equities, he's actually a Britalian gentleman from your neck of the woods. He knows I pathologically detest Peter Schiff coming from an econ background. Anyway, he told us Schiff has been saying the same shit since 2002. The SAME EXACT predictions.
By the way, on a side note, I don't understand this whole "devaluing" and "debasing" meme by the hard money crowd. The dollar doesn't have a baseline or base so to speak.
The Federal Reserve started to add reserves back in '08 when the Lehman Brothers shit storm surfaced. Reserve balances did skyrocket (not really important), settling at $3 trillion give or take.
The dollar still went up. Your charts are what raised my curiosity. Take a look at the Federal Reserves trade-weighted index. This tracks the dollar's exchange value against countries all over the world.
Here:
Actual URL click HERE
And what happened to the dollar? It went up. When When the FED started to take action the index was 95, it reached 99 in April, now it's over 100. Peter Schiff continues to parrot the debasing nonsense without someone correcting him on his bullshit.
The trade-weighted dollar index generally goes up when it's strong against all the currencies it is weighted against, which are far more currencies than the average Dollar Index. There are plenty of currencies to consider, but I'm sure if I look through just a few, I can explain why the TW Dollar Index is rising. I doubt it has anything to do with any FOMC actions.
For example, the Dollar rose today based on news from the ECB regarding interest rates and how they are here to stay for a while.
Mostly every central bank in the world is competitively devaluing their currency, but they're doing it to prop you up.
Yeah, I saw that on Bloomberg.
Actually, the US dollar looks like it has gone down if we look at it in nominal terms. For example, members of the brain trust, such as Ed, our resident genius, will give us an example about how a new car cost $4000 in like 1976 or some shit. If we analyze it in the amount of hours of labor needed to buy the car, it takes WAY less labor hours today than it did in 1976. We also get so much much more for our work. We have cars with GPS, air bags, better gas mileage, power everything, etc.
The dollar is actually quite strong. This is my two cents....
He's been parroting the same thing for over 10 years. Seriously?
I am assuming those were his new predictions after what happened during 2008. Seeing some of his speeches, I know some of those predictions are in reference to the 2008 financial crisis.
My VP (boss, capo of the regime
I am assuming those were his new predictions after what happened during 2008. Seeing some of his speeches, I know some of those predictions are in reference to the 2008 financial crisis.
My VP (boss, capo of the regime
Well, he is persistent. They don't call him Doctor Doom for nothing.
It wouldn't have happened to be the Money Show, would it?
Cool, bond traders are a varied bunch.
This thread has inspired me to start a blog.
Kyle Bass has been telling us that the Japanese market is going to implode for the last four years. He keeps betting against the Japanese bond market in a pathological fashion. He also like gold, no surprise. We should bookmark this thread.
Most threads are fun when you can gang up on the minority opinion.
By the way, on a side note, I don't understand this whole "devaluing" and "debasing" meme by the hard money crowd. The dollar doesn't have a baseline or base so to speak.
The Federal Reserve started to add reserves back in '08 when the Lehman Brothers shit storm surfaced. Reserve balances did skyrocket (not really important), settling at $3 trillion give or take.
The dollar still went up. Your charts are what raised my curiosity. Take a look at the Federal Reserves trade-weighted index. This tracks the dollar's exchange value against countries all over the world.
Here:
Actual URL click HERE
And what happened to the dollar? It went up. When When the FED started to take action the index was 95, it reached 99, now it's over 100. Peter Schiff continues to parrot the debasing nonsense without someone correcting him on his bullshit.
Edit to add:
I responded to your trade deficit post, btw.
Here
Mostly every central bank in the world is competitively devaluing their currency, but they're doing it to prop you up.
Mostly every central bank in the world is competitively devaluing their currency, but they're doing it to prop you up.
Right.
I always told everyone that when Bernanke et. al. were busy devaluing the dollar, there was no way that $3=1 or whatever as it is politically untenable for Europe to allow the manufacturing base of the Rhein to relocate to Alabama. Since the dollar is the peg to which all currencies are attached, a devaluing dollar would drag all other fiat currencies down with it.
