Stocks Will Go Higher if We Keep Printing Money

Today the Dow surpassed $14,000. The crowd cheers. The Fed is buying $85 billion a month, about what the US fiscal deficit is, so then stock prices do and will continue to go up. 

Everyone cheers...

But, the cheering actually means nothing.... As Kyle Bass says, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs." 

Is there any wonder as to what is going to happen in the USA?

Please refer to Zerohedge and Kyle Bass Tells 'Nominal' Stock Market Cheerleaders: Remember Zimbabwe  

Amid the euphoria of today's crossing of the Dow's Maginot Line at 14,000, Kyle Bass provided a few minutes of sanity this morning in an interview with CNBC's Gary Kaminsky. Bass starts by reflecting on the ongoing (and escalating) money-printing (or balance sheet expansion as we noted here) as the driver of stock movements currently and would not be surprised to see them move higher still (given the ongoing printing expected). However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed.

Now Japan's stock market has been climbing higher and higher in the last two months also. The Japanese government has been printing and printing.The currency war has begun and we (the people) will be the losers.

Is there any wonder as to what is going to happen in Japan?

For the Keynesians out there who think this is good fiscal policy, then let me ask the tried and true question, "If government's can create wealth just by printing money, then why are there still poor and starving people in the world?"

The answer is obvious; you cannot fix a debt problem by creation of more debt.

PS: The Japanese stock market has gone way up in January 2013, right? WRONG! It has flatlined against the US dollar:

How Much Has the Japanese Stock Market Risen in January 2013?

There is a rising roar of bulls stampeding to the Japanese stock market. Whether due to Abe's apparent "this time it's different" cratering of the JPY to aid exports (and avoid deflation) or just plain old momentum (as the Nikkei 225 is nominally up almost 8% in January). However, just a little reminder that this return is priced in those increasing worth-less JPY. For all those exuberant overseas investors eying the gains, the reality is that, in USD, Japan's stock market is almost perfectly unchanged since 12/28

Great work, Abe... Deeper in debt and nothing to show for it except the destruction of the purchasing power of the yen.

Bank of Japan Flushes Another $123 Billion Dollars Down the Toilet!

‎"Paper money eventually returns to its intrinsic value — zero.” - Voltaire

They did it again! This is complete and total madness. I rarely am speechless, but this news just dumbfounds me. I really don't know what to say or, even if I want to say anything. This kind of news just makes me want to shrug my shoulders and throw my hands in the air in complete disgust... 


Damn! I need a stiff drink!

At least last weeks F-up, when the idiot prime minister just up and gave away $57 billion dollars of money that Japan doesn't have, that made me mad enough to write  commentary. You see, probably because that doesn't happen too often... (once is one time too often as it is).... But the Bank of Japan debasing the currency - repeatedly - in a hope to stop deflation and arrest the yen's rise, seems to happen every six months...


The Bank of Japan has made another effort to buy assets and debase the currency of this country. That's four times in the last 18 months or so... The last three didn't work, so why not throw away another few hundred billion dollars?


How many times do they have to do this, and have the failure repeated, before they ever figure out that this doesn't work?  Zerohedge reports in BOJ Eases. Einstein Rolls Over in His Grave:

"...the BoJ defends its decision to follow Einstein's definition of insanity  by doing the same thing over and over again expecting a different outcome (Nov 2008 was the last time CPI was above 1% YoY). Admittedly, at some point the ever-increasing BoJ balance-sheet-to-GDP will become too much even for a nation hell-bent on printing its way out of chronic deflation only to be punched-and-kicked by a balance-sheet-recession so deep and full of deleveragers. The facts are that the BoJ will expand its LSAP-equivalent program by JPY10tn (USD123bn) - raising the 'stock' - but maintaining the same pace of JGB-buying at JPY1.8tn per month - leaving the 'flow' stable - hence extending the program by around six months." (read the rest at Zerohedge)

Simply put, LSAP is another word for “money printing”... They keep doing this over and over (for the last 20+ years) and the results are the same. Yet they keep doing it. 


I no longer get mad at this, folks. Why should I? It's like a dumb puppy you bought. At 8 weeks old, the dog keeps sh*tting on the living room rug. You keep getting mad and yelling and screaming about it over and over. But the dog keeps doing it over and over everyday.


Day after day, over and over; the dog sh*ts on the rug. One day, you realize that the dog is too old now to be trained and is just plain stupid and is going to keep sh*tting on the living room rug no matter how much you piss and moan about it. What you going to do about it then? 

Are you going to keep getting mad and screaming about it? Will you get all riled up and let it destroy your health and give you high blood pressure and a heart attack? Or will you accept that it is what it is?


I'd get mad, I suppose, but since I am not Japanese, I cannot become a politician in this country and I cannot vote... So I can scream and scream... Nothing changes... I try to get the people of this country mad about it, but not enough people seem to care... 


I guess I'm either tired now or I've given up on these people in government and the Japanese people who are going to pay the price for this when the party ends. 


When the sh*t hits the fan, don't say that I didn't try to warn you. 


You'd better accumulate all the gold and silver you can while you can because this ain't going to be pretty. 


Read about how we're heading for a cliff in "Japan's Economic Collapse Will be Absolute and it Cannot be Stopped"