…but that’s about all and probably not much. Stock markets at highs, precious metals under pressure and bond yields down, what more could you want to “show” that all is well across the land? Well, a couple of “humorous” pieces of news have surfaced beyond what we knew yesterday as to upcoming events that will best be viewed with a bowl of popcorn by your side. It turns out that Spain funded their own debt market the second half of last year by stuffing their equivalent of Social Security with their own sovereign debt. The pension now consists 97% of Spanish sovereign debt. SHOCKING until you look at our own plan which is basically 100% US Treasuries and Agencies. What could possibly go wrong here?

Then we heard from Japan last night (that little island that’s just “glowing” with economic activity). They announced a $1.4 trillion “printing/stimulus” package over the next two years. $1.4 TRILLION! Let me put this in perspective for you, this amount will first of all literally double their money supply in 2 years. It is not one $700 billion U.S. TARP plan. No, it’s TWO back to back from an island the size of New Jersey! But wait, let me REALLY put it into perspective for you. Do you know how much $1.4 trillion really is? At today’s price of gold, it is equal to 7 YEARS of GLOBAL PRODUCTION (what is it about this 7 years stuff? First Germany waits 7 years for their Gold, now Japan does a print job equal to 7 years of global production?).

Where oh where will the Bank of Japan eventually sell these radioactive securities in the marketplace? Especially with the whopping 1/2 of 1% interest that they are paying. AND after telling the world that their currency will be worth almost exactly 1/2 of what it’s “worth” now after doubling the money supply? Let me do a little crude math for you here, In 2 years the buyer of a ten year Samurai bond will earn a cumulative 1% in interest… the Yen will theoretically be worth 50% of what it is today if the money supply doubles as they promise, leaving the buyer with a 49% loss. In the words of “Ronco,” but wait there’s more! What happens if interest rates double to a whopping 1% in 2 years? Another 50% haircut leaving you with 24% of your original investment? Or what if the unthinkable happens and rates go to sky high levels like 2%? Another 50% haircut? I have to stop here because the math is getting just too hard for me… and you get the point anyway, they are announcing a devaluation of the Yen in
massive terms.

Read More at Miles Franklin . By Bill Holter.

The profound shift in economic strategy by the world’s top creditor nation could prove a powerful tonic for the global economy, with stimulus leaking into bourses and bond markets – a variant of the “carry trade” earlier this decade but potentially on a larger scale.

“We think this could be the beginning of a fresh reflation cycle for the global system, combining with the US recovery to mark a turning point in the crisis,” said Simon Derrick from BNY Mellon.

“It is tremendously important for global growth, and markets are starting to take note,” said Lars Christensen from Danske Bank.

Mr Abe’s Liberal Democratic Party (LDP) won a landslide victory on Sunday, securing a two-thirds “super-majority” in the Diet with allies that can override senate vetoes.

Armed with a crushing mandate, Mr Abe said he would “set a policy accord” with the Bank of Japan for a mandatory inflation target of 2pc, backed by “unlimited” monetary stimulus.

Read More at telegraph.co.uk . By Ambrose Evans-Pritchard.