The Road To ZERO

I am not sure that everyone is aware of the global macro calendar this week, but on Friday (our Thursday night), the Bank of Japan is going to be making their call on interest rates. While the chart below looks more Japanese than it does American, look at it for what it is… and don’t think for one second that Japan won’t follow “Heli-Ben’s” move on Friday and cut to ZERO as well – been there, done that. These guys are the FREE money, flat yield curve, pros.

Now people who have been missing the latest “Re-flation” in Chinese stocks and gold (we have been long both) are going to be delivered the revisionist memo as to the ever so elusive macro “WHY”!

FREE money is crushing the US currency alongside the integrity of “Investment Banking Inc.’s” handshake. As the bond market begins to figure out that all is no longer safe in the land of nod – the “Re-flation” squeeze in US equities, and equities globally, will defy the academic view (which I agree with) that this Japanese exercise will not end well.

Strap on your seatbelt’s.
KM