Tuesday, December 1, 2009

10,000,000,000,000 Yens To Fight Deflation and Drive Stocks Higher, And Make Poor People Hungry

“The BOJ’s understanding is that deflation risks have increased.” said Junko Nishioka chief economist at RBS Securities Japan Ltd. in Tokyo.

The Bank of Japan's new 10,000,000,000,000 yen 3-month 0.1% loans seem designed to prop up stocks and commodities. What else would rock people and bankers going to do with 0.1% loans?

Somebody, sometime in the future will pay for this bill. It may be us, it may be our children. In the meantime, a lot of people are going hungry as commodities, grains, food staples, you name it, will rise in price, while people's income remain the same (the lucky ones that actually have jobs and income) .

Says Phil Davis today in his daily commentary: "Making bonds worthless is a great way to force more money into the stock market, which is also fueled by low-cost margin loans and, don’t forget, those commercial banks can leverage up that $115Bn ten to one - so we’re talking about 100 Trillion Yen put into play last night and that’s over $1Tn US Dollars, which is quite a lot - even if they don’t buy what they used to…

So what the G20 is telling us is that, no matter what price commodities are and, whether people can afford them or not, they are NOT going to let those prices fall. Better some starving poor people than some upset rich people seems to be the working theory".

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1 comment:

Paul said...

with charitable donations way down and food prices already multiples of a few years before, I can't imagine how many more will die of hunger in this world in the coming years because of these irresponsible acts

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