What Doomer Doug has feared would happen in Japan has now started. The Nikkei has dropped 5.51 percent and 733 points in the morning session. It was down nearly 6 percent and 800 points a few minutes ago. The Yen is now in free fall and underneath the 95 level. Again, this is a six point drop since June 7th. The pressure on Japan’s banks, and the global export market now resembles a depth charge going off next to the hull of a World War Two Gato class submarine. We are not quite at the stage where the hull is crushed, yet!
The definition of insanity is doing the same thing twice and expecting a different result. The idea the Bank of Japan can flood the markets with masses of fiat money and get a different result than what is going on now is insane. Some people were mislead by the market rally the other day. This “rally” was based on the belief the money gravy train would continue. It will not. The fiat money gravy train is derailed. The crash process is like the beginning of the movie “The Fugitive.” Now THAT was a train crash!
Will the Nikkei stay down 800 points today? Doomer Doug has no idea. Will Japan’s pump monkeys come to the rescue? Doomer Doug has no idea. The basic reality here is Japan is now beyond the scope of rational economic decisions and results. The central bankers, on a global basis, HAVE NO IDEA OF WHAT THEY ARE DOING! Of course, they haven’t had any idea since the Federal Reserve was created back in 1913. This ingrained stupidity is nothing new. What is new is the level of global economic chaos, as well as the likely result of this chaos.
Again, things are not going to get better in Japan. They will continue to lurch along until the excess is purged out of the markets. This global stock market excess will reflect what happened during the Great Depression. The stock markets lost 90 percent of their total 1929 value over a two decade period. Japan has lost 27,500 points since December 1989. This is a stunning decline of very close to 70 percent of value. The media shills with their bought and paid for advice on buying the dips are shown to be frauds. Assuming anybody in Japan bought the Nikkei 225 at 15,500 they would have lost 3000 points and nearly 20 percent of the value. This is in a time frame measured in days and not decades.
A Nikkei that has lost 90 percent of its value since 1989 will be in the 4000 point range. This means the Nikkei has another 8000 points to go from today. Some of you may think this is a fantasy valuation. It is not. It is the HISTORICAL NORM BASED ON THE ACTUAL BEHAVIOR OF THE GLOBAL STOCK MARKETS IN THE GREAT DEPRESSION. Those of you who say it can’t happen need to understand that it already happened once before.
The implications of all global stock markets losing 90 percent of their value from peak highs is too appalling for Doomer Doug to consider.
Lock and Load, gang. Today is the real beginning. Do not be mislead by daily pump monkey gyrations. The url is here.
By the way, in the time it took Doomer Doug to write this blog post the Nikkei has crashed through the 800 point and 6 percent level. The pump monkeys then flooded it with BOJ cash and now have it at 686 points down and 5.17 percent down. You can see right at 11 am Japan time where the BOJ money spigot opened. It will do them no good long term. You can never reinforce failure. You can never turn market sentiment. You can certainly pour enough money in to buy the powers that be some time. This is all they are doing.