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Like Bugs Looking For Windshields

Posted by
January 30, 2012
in Blog

Largest Central Banks Now Hold Over 15 Trillion in Fictitious Capital

By Russ Winter01/27/2012

I could not help noticing that China’s imports from Japan fell 16.2pc in December. Imports from Taiwan fell 6.2pc. The strong yen strikes again: Honda decides to build a high-performance hybrid Acura in Ohio – instead of its home nation of Japan. The firm’s continued shift in production to North American capacity signals a wider trend of Japan’s automakers to battle currency-related losses by moving operations.

Japan is on life support. The largest buyers of their debt are now sellers. Japan Post Holdings holds almost 3 trillion dollars of JGB’s and GPIF, the retirement fund, holds over $1 Trillion of JGB’s. Japan Post is the largest financial institution in the world and has 75% of assets in JGB’s and now wants to diversify. The retirement fund is liquidating $80+ billion per year to pay out benefits. Just read that the banks across Japan have 25% of assets in JGB’s and the IMF is coming over this summer to do an interest rate risk analysis if rates were to move 1% (double) what would be the impact to the capital of the banks? Are the banks going to move to 30%, no.

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image: Moody