Doomer Doug has to wonder if Japan’s stock investors are starting to suffer brain damage from the Fukushima toxic radiation releases. The Nikkei 225 has lost some 15 percent of its value in the last seven days. The hysterical rally yesterday is a sign of mental illness in my opinion. The news media is telling us, with a straight face mind you, that the rally happened due to investor confidence on further easing by the Bank of Japan. Financial stocks led the upward surge on this more easing fantasy. Exactly why further easing would happen, much less ignite a second wave of stock rallying is ignored.
For the record, the BOJ has fully endorsed of policy of destroying the value of yen. The BOJ is dumping some $85 billion dollars into the economy of Japan daily since January. The US Federal Reserve has followed the exact same policy for the last several years. The result has been a massive increase in debt. The result has been an induced stock market rally.
There is no free lunch. Actions have consequences. The BOJ is now embarked on a policy that will eventually lead to the destruction of Japan’s currency.
Global stock markets currently have no relation with economic reality at this late stage of the game. The powers that be have decided to milk the sheeple down to the last cent. They have been doing this for many years now.
Japan has concluded it needs to do a Federal Reserve style TARP fund direct injection of money into the stock and bond markets. Japan is playing a very dangerous game here.
The time frame for all this has been compressed significantly due to Japan’s wild gyrations in the Nikkei 225. One thing is clear to Doomer Doug. This is not sustainable. The reason it is not sustainable is the global debt is UNPAYABLE. It always has been unpayable. The only thing holding the global economic system up is the denial of this one simple fact.
At any rate, Japan has made a decision that will have global implications in the near future.