Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Who is Spreading the Virus? UK Coronavirus 2nd Wave Analysis - 30th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part II - 30th Sep 20
The Only Thing Systematic Is The Destruction Of America - 29th Sep 20
Fractional-Reserve Banking Is The Elephant In The Room - 29th Sep 20
Gold And Silver Follow Up & Future Predictions For 2020 & 2021 – Part I - 29th Sep 20
Stock Market Short-term Reversal - 29th Sep 20
How Trump co-opted the religious right and stacked the courts with conservatives - 29th Sep 20
Which RTX 3080 GPU to BUY and AVOID! Nvidia, Asus, MSI , Palit, Gigabyte, Zotac, MLCC vs POSCAPS - 29th Sep 20
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Serious Warning No One’s Talking About

Stock-Markets / Financial Markets 2016 Jul 22, 2016 - 04:44 PM GMT

By: Casey_Research

Stock-Markets

By Justin Spittler

On Tuesday, a huge event happened in the investing world.

But if you’re like most Americans, you probably haven’t even heard about it.

The mainstream media didn’t discuss this event much. It was too busy pointing out that the S&P 500 and Dow Jones Industrial Average have hit new all-time highs.

Meanwhile, something much bigger was happening on the other side of the world.


Today, we’ll tell you what this event was…and why it means big trouble is likely on the way for investors.

• Earlier this week, the Japanese yen plummeted…

It fell 1% over Monday and Tuesday.

This might not sound like a big deal. But it was the yen’s biggest two-day slide since November 2014.

Japanese Prime Minister Shinzo Abe triggered the plunge when he surprised the world with an announcement on Tuesday. Bloomberg Business reported:

The currency fell by more than 1 percent against all of its 31 major peers after Abe said he planned to add fiscal stimulus after his victory in last weekend’s upper house election. The premier indicated Tuesday he will order ministers to prepare plans for further measures aimed at supporting domestic demand.

According to The Wall Street Journal, “The prime minister is widely expected to compile a new spending package worth more than ¥10 trillion ($96 billion) in the autumn.”

“Further measures” could also include more monetary stimulus. Bloomberg explained:

BOJ [Bank of Japan] Governor Haruhiko Kuroda has repeatedly said the central bank won’t hesitate to expand stimulus. More than half of economists surveyed before the June meeting were predicting a move on July 29.

• Governments often use reckless monetary policies to try to stimulate their sluggish economies…

Since the 2008 financial crisis, desperate governments have printed trillions of dollars and cut interest rates to unnaturally low levels.

But if you’ve been reading the Dispatch, you know Japan is the worst offender of all. As we’ve explained, it has gone “all in” trying to stimulate its economy, even before Abe’s big announcement.

The BOJ is currently pumping 80 trillion yen ($671 billion) into Japan’s financial system each year through quantitative easing (QE). That’s when a central bank creates money from nothing and injects it into the financial system. QE is the modern-day version of money printing.

The BOJ also introduced negative interest rates in January. Regular readers know negative rates basically flip your bank account on its head. Instead of collecting interest on the money you keep in the bank, you pay the bank to look after your money.

In short, these "stimulus" measures haven't worked. Japan’s economy hasn’t grown since the 1990s. Its stock market is doing poorly too. The Nikkei 225, Japan's version of the S&P 500, is down 12% this year.

And now, it looks like the BOJ is about to do something even more drastic…

• Former Federal Reserve Chair Ben Bernanke met with Abe yesterday…

As you probably know, Bernanke ran the Fed from 2006 to 2014. Under his watch, the Fed cut interest rates to effectively zero. And he pumped $3.5 trillion into the U.S. financial system using QE.

According to Bernanke, there’s still a lot more the BOJ can do to jumpstart Japan’s economy. The Wall Street Journal reported:

Bernanke rejected the notion that the Bank of Japan is short of ammunition when he met with Prime Minister Shinzo Abe Tuesday.

Mr. Bernanke noted during the face-to-face meeting that Japan’s central bank still has a range of monetary easing measures at its disposal, according to Chief Cabinet Secretary Yoshihide Suga.

You may also know Bernanke by his nickname, “Helicopter Ben.” He earned this nickname in 2002 when he said Japan should use “helicopter money” to jumpstart its stagnant economy.

“Helicopter money” is a highly experimental government policy that involves handing people free cash. Until recently, most economists didn’t take it seriously. But just a few months ago, Bernanke wrote that “Helicopter money could prove a valuable tool.”

This has led many folks to believe that "helicopter money" is coming to Japan. The Wall Street Journal continued:

Mr. Bernanke visited Tokyo at a time of intense speculation that Mr. Abe may resort to so-called “helicopter money,” a radical form of monetary easing advocated by the former Fed chief…

Koichi Hamada, a close adviser to Mr. Abe, said Mr. Bernanke may have discussed helicopter money with Japanese officials he met with during his visit.

• Helicopter money won’t fix Japan’s economy…

It will only destroy the value of the yen.

That’s what happens when a central bank prints money. You end up with more paper currency chasing the same amount of goods and services. Everything from a gallon of milk to a new house costs more.

Consider what’s recently happened in Venezuela and Argentina. As we explained last month, these countries tried to jumpstart their economies using helicopter money. Both times, it sparked a full-blown currency crisis.

Inflation in Argentina is currently running about 40% per year. It’s even worse in Venezuela.

Last year, inflation in Venezuela hit a record high of 181%. And it’s only heading higher. According to the International Monetary Fund (IMF), inflation in Venezuela could skyrocket to 1,642% next year.

The same thing will happen to the yen if the BOJ continues to recklessly print money.

If you have money in Japanese bonds or yen, we encourage you to get it out as soon as possible.

• But Japan isn’t the only government you need to worry about

Every major central bank in the world has gone overboard with easy money.

According to MarketWatch, central banks have cut rates more than 650 times since the 2008 financial crisis. They’ve “printed” more than $12 trillion.

Eventually, central bankers will destroy the paper currencies they’re supposed to defend.

That's why it's critical to own gold today, before it's too late.

As we often remind you, gold is real money. It’s preserved wealth for centuries because it has a rare set of attributes: It’s durable, easy to transport, and easily divisible. Its value doesn’t depend on a government or central bank. That’s why the price of gold often soars when governments do reckless things like print money.

This year, gold is up 26%. It’s trading at the highest level in two years. But it will likely head much higher. Casey Research Founder Doug Casey says gold prices could easily triple in the coming years.

To learn why, watch this short presentation. It explains why the world is in the early stages of a global currency crisis. By the end, you’ll understand why we’ve been pounding the table about gold so much recently. Click here to watch this free video.

Chart of the Day

Japanese banks are trading like a major crisis is coming.

Regular readers know we watch bank stocks closely. That’s because banks are pillars of the global financial system. They keep money flowing through the economy. If they’re in trouble, it often means something is wrong with the financial system.

If you’ve been reading the Dispatch, you know that’s exactly what bank stocks have been saying lately. As we've shown readers, many of the world’s biggest bank stocks have crashed recently. Some are now in free fall. For example, Deutsche Bank (DB), Germany’s biggest lender, has plunged 52% over the past year. Swiss banking giant UBS (UBS) is down 56%.

This selloff has hit European banks the hardest. But, as you can see below, Japanese banks have crashed too.

Today’s chart shows the performance of the TOPIX Banks Index over the past year. This index tracks Japan’s biggest banks. You can see that it’s plunged 40% since last July. This tells us Japan’s banking system has serious problems…and it's another reason to be concerned about a global banking crisis.

The article The Serious Warning No One’s Talking About was originally published at caseyresearch.com.
Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules