If you have it, the Bank of Japan will buy it. The BoJ cut interest rates from .1% to a range of zero to .1% and announced a 5T yen fund to buy not just JGB’s but corporate debt, commercial paper, ETF’s and Japanese REIT’s. If you live in Japan and thought about selling stuff in the closet on EBAY, hawk it to the BoJ instead. Bernanke in the Q&A of a speech on Fiscal Sustainability last night responded to a question about QE and said “I do think that the additional purchases…have the ability to ease financial conditions.” Another round of QE seems inevitable with the size and pace being the only question. It’s no wonder that gold is rising to another record high. Gold is not in a bubble, money printing is. Emerging economies however are not happy with the rise in their currencies. Brazil doubled the tax on foreign purchases of fixed income and South Korea said banks who do FX trades will face audits.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “If you have it, the BoJ will buy it”

  1. mrmike23 says:

    Why is this good news to the market? Doesn’t this temporary, stop-gap measure indicate that Japan’s economy (among most of the rest of the world’s) is in the toilet? What would make the market go up like this is good news? I’m sure there is logic to the market but I cannot figure it out.

  2. [...] love this line from Peter Boockvar: “If you live in Japan and thought about selling stuff in the closet on EBAY, hawk it to the [...]

  3. [...] Paul Vigna on October 05, 2010 Economy, Foreign Exchange, Geopolitical This is just a brilliant insight from Peter Boockvar of Miller Tabak, writing at The Big Picture. The bubble isn’t in gold, or [...]

  4. it is not that gold is rising, all the paper around it is losing value

  5. gordo365 says:

    Common Man – EXACTLY.

    I get tired of the “gold has no real value” talk.

    By same reasoning – a mint condition 68 Chevy Camero has no value. Doesn’t pay a dividend. Can’t use it as a delivery truck blah blah blah.

    It is scarce, there is demand for it – and the currency used to assign value to it is worth less and less.