Japan’s Crisis Is Spreading To The World
Central banks don’t hike rates during a recession. Or do they? The Bank of Japan just did and for the second time. By doing it, BoJ is laying itself bare; both in terms of transparently acting politically and maybe more important exposing the lie about interest rate policies. Peter Pan is not happy.
Eurodollar University’s Money & Macro Analysis
Bank of Japan Change in the Guideline for Money Market Operations and Decision on the Plan
for the Reduction of the Purchase Amount of Japanese Government Bonds
https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2024/k240731a.pdf
Nikkei Bank of Japan raises interest rate to 0.25%, open to further hike this year
https://asia.nikkei.com/Economy/Bank-of-Japan/Bank-of-Japan-raises-interest-rate-to-0.25-open-to-further-hike-this-year
Japan Times Bank of Japan delivers one-two punch few were expecting
https://www.japantimes.co.jp/business/2024/07/31/economy/boj-rates/
Wall Street Journal Bank of Japan Raises Rates, Driving Up Yen
https://www.wsj.com/economy/central-banking/bank-of-japan-hikes-rates-tapers-bond-buying-in-fresh-step-to-policy-normalization-bc8c33fb
Bloomberg Japan’s Central Bank Hikes Key Rate Hours Before the Fed
https://www.bloomberg.com/news/articles/2024-07-31/boj-hikes-interest-rate-unveils-plan-to-cut-back-bond-buying
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU
39 Comments
I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Elizabeth Slone
Interest rate changes have such a complex ripple through the economy that the fed doesn’t consider. The obvious changes in demand often overlook the changes in supply, or vice versa. housing market is a great example where higher interest rates should lower home prices, but supply plummeted because nobody wants to sell their home to go into a higher rate and made prices even higher, at least in the short run.
I’m interested to see how this will play out.
Interesting how over 2% inflation has been a concern when central banks and the Fed begin to hike interest rates. I consider the rising interest rate to be a very serious issue since it will undoubtedly cause more investors to withdraw their money from the stock market. But then I'm still aware of certain investors that continue to earn over $365,000. Wish I could accomplish that.
After being on the wrong side of the Bond trade for the past four years, Jeff is desperate for you to fund his losses.
Yen 149.5.
A place where the notion of justice" is holding people hostage without a trial untill they confess has to fall before It gets any better sadly
Any "spending" in the Japanese economy is purely due to the tourists. Take tourism away and the economy is in a far far worse shape
Respectfully, you have been completely wrong re the Yen weakness. They raise rates, the USD is expected to cut, and the Yen plunges. Interest rate differentials DO matter.
Market went up again today
Wouldn’t you say that central banks only care about systemic risk?
here;s a controversial idea….cut government spending & reduce the national debt, funny that this is never even discussed as an idea.
Turkey raised their interest rate in a recession too, correct?
Peter Pan "To die would be an awfully big adventure".
Amazing video, you work for 4Oyrs to have $1M in your retirement, meanwhile some people are putting just $10K into trading from just few months ago and now they are multimillionaires.
The gift of the Covid lock downs keep giving.
Good coverage of Japan. Thanks!
Short term target: 1.19%, current rate hike: 0.18->0.25, next: probably 0.4-0.45. Super long term target: ~4.4%
This is what the THIRD WORLD country used to do. Now, JAPAN is doing it. It means it won't be too far from WE may end up doing something similar in the US, just like the UK did when its bond market tanked in the middle of the COVID recession. 😱
thanks Jeff
I foresee a recession lasting 2-3 years, and if inflation continues to surge, the Federal Reserve will likely raise interest rates soon. Inflation is causing various issues worldwide, such as food shortages, scarcities of diesel and heating fuel, and significant spikes in housing prices, leading to a potential financial market crash. This global downturn could have long-lasting repercussions. Given the current inflation rate of approximately 9%, my main worry is how to optimize my savings and retirement fund, which has remained stagnant at around $300,000, yielding almost no gains for quite some time.
Massive dollars will flow back to Japan as the Japanese Yen carry trade unwinds. Japanese interest rates begin to rise and Japanese banks and insurance companies begin to buy JGBs. This is why Warren Buffett and Michael Burry are so bullish on the Japanese stocks
Inflation is low, Unemployment near 0 and wages are up. This is a recession? The US could only wish for that.
Yen is being completely crushed by foreign borrowers using japan's low interest rate as a way to get "free" money in yen and then converting it to dollar to invest in a carry trade or dispersion trade. They had to hike. They should actually hike more and aggressively too in order to shake out these foreign borrowers.
They don't want to fix the real underlying issues of the japanese economy,
the rate hike is not your normal rate hike since the rate was previously at 0%.
Even forgetting the yen carry trade or japans national debt, the usd to jpy for the last 4 business cycles has the same pattern. The yen gets weaker comparitively in the last phase of booms and then strengthens in busts. The same will happen again. Usd jpy will likely fall over the next couple of years to 80 to 100 like it has every other time.
To be honest, I've lost any hope on a crisis and a housing market crash. You and other youtubers have been saying that a crash is near and it'll happen in a worse fashion way than 2008, but I don't think so. People are still holding out to their mortgages, the unemployment has been steadly raising, but no consequence of that has been seen. Fed's gonna cut rates next september, wich will aliviate the pressure on the mortgages, so I can't see a crash anytime soon…
Japan used to be a major producer of industrial products. China became the major producer of industrial products. Japan has been recession during China's rise. Since China has focused their modernization and industrialization drive into military expansion, it is high time to abandon the miss labeled 'Free Trade" to efficiently ensure domestic competition for at least 50% of domestic consumption. Trade could be allowed for the remaining 50% except in critical supply chain categories like pharmaceuticals. Therefore, it would be in Japan's interest to allow their currency to devalue like China has for years.
"supply shock" from unnecessary copying- communist -China lockdowns?
LMFAO… Listen up My Peeps. What this is is DESPERATION… The TRUTH : ALL FIAT IS DYING… THATS THE FACTS… Question is who will DIE First ?
Jeff love you guy…get that mop trimmed. OK?
Thanks Jeff
I am from Canada,it's seems like Canada is going to be next japan
There is a much simpler and correct explanation for all of this. Almost all governments, with help from their central banks, are debasing their currencies. This debasement just happens at different rates. You may now place your bets in the casino. 😂
Raising rates aren’t doing anything because they raised from 0% to 0.10%.
Japan's 80 percent pensions invested in China's dfi what returns to date
Our central bank and government terriffs sets the rates for Japan not them and always have. With the wonderful 22% inflation we are having with 8% borrowing cost vehicle sales are way down in us and international witch is japans primary export. That is what stimulates growth there not small rate adjustments up or down in there central bank. Exports The top exports of Japan are Cars ($89B), Machinery Having Individual Functions ($38.5B), Integrated Circuits ($36.9B), Motor vehicles; parts and accessories (8701 to 8705) ($30.6B), and Refined Petroleum ($14.5B), exporting mostly to United States ($137B), China ($135B), South Korea ($50.8B)
Given the persisting global economic crisis, it's essential for individuals to focus on diversifying their income streams independent of governmental reliance. This involves exploring options such as stocks, gold, silver, and digital currencies. Despite the adversity in the economy, now is an opportune moment to contemplate these investment avenues.
No coincidence …. “Every Bank in Japan Will Use Ripple's XRP By 2025” SBI CEO Yoshitaka Kitao, the CEO of Strategic Business Innovator Group (SBI)