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Thursday, May 28, 2009

The hyperinflation begins with such moves

Japan has already an unbelievable deficit and wants to print half a tril $ on top of that to buy Japanese stocks - by the way they did that already on the way down as they ordered the government run pension funds to load up on stocks on much higher levels. Basically the Japanese stock market is inflated by artificial created money which was financed at a rate of 'zero' as long as there was still enough morons to buy worthless paper it worked out to a small degree. Foreigners might have gained the last 2 years as the carry trade unwinding brought currency profits but that is a simple currency tradeanyway.
Why do I tell this as on the chart below you can see also the American curve and its now on the path of Japan and the the statistics do not tell the whole truth as the FED has created money by printing which is not in the debt statistics yet but America is already above 100% of GDP and the trend keeps marching. The problem will be as all developed countries are on this path the difference to Japan will be that there is no last resort to buy left at some point which leads to simple printing of money and that creates hyperinflation.I am not sure if we really reach Marc Faber call but we are on the way to some insane levels.

Excerpt

U.S. Inflation to Approach Zimbabwe Level, Faber Says

http://www.bloomberg.com/apps/news?pid=20603037&sid=avgZDYM6mTFA&refer=home

Excerpt

click on this link to see the chart

http://en.wikipedia.org/wiki/File:PublicDebtTriade.PNG


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I am a professional independent trader