There will be a fight over raising the debt limit. The “nay” vote to raise it will win at the outset. Eventually, the “yay” vote will win and we will raise the debt limit. The government won’t get shut down, but the media will try to scare everyone by saying that social security payments might not go out if the republicans keep voting against raising the debt limit (which isn’t true). Those stories will damage the republicans and the whole fight will not have been worth it.
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Japan’s central bank, the Bank of Japan, or BoJ, is beginning to lose control of its financial system.
The BoJ is the grandfather of monetary insanity. The U.S.’s Federal Reserve (the Fed) first introduced Zero Interest Rate Policy (ZIRP) and Quantitative Easing (QE) in 2008.
The BoJ introduced them in 1999 and 2001, respectively.
Since that time, the BoJ has NEVER been able to normalize monetary policy. The longest it managed to tighten financial conditions without having to reverse and start easing again was a measly 14 months.
So we’re talking about 20+ years of loose monetary policy or a slow-motion nationalization of Japan’s financial system. The BoJ has bought so many assets during this time that today it:
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Owns more than half (50%) of all Japan Government Bonds outstanding.
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Owns more Japanese stocks than any other entity (country or institution) in the world.
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Is a top 10 shareholder in 40% of Japan’s publicly listed companies.
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Has a balance sheet that is equal to 92% of Japan’s GDP.
…
And that’s when things started to break: the Yen collapsed to a 35 year low.
…
The BoJ is now in a corner. If it keeps printing money to defend bonds the Yen collapses making inflation worse. And if it doesn’t print money to defend bonds the bond yields soar and Japan becomes insolvent (unable to make debt payments).
As I keep stating, the Great Crisis… the one to which 2008 was a warm-up, has finally arrived. In 2008 entire banks went bust. In 2022, entire countries will do so.
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The new, Democrat-led Senate’s district work period runs from Jan. 4-Jan. 20, according to the legislative calendar. The Senate isn’t scheduled to return until Feb. 6. The GOP-led House is out of session until Jan. 24.
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Regarding the Strategic Democrat Re-election Reserve,
House Republicans earlier this month passed a bill to protect America’s strategic oil reserves from being sold to China, with an eye toward passing more laws to protect the Strategic Petroleum Reserve from abuse by the Biden administration.
“The administration is not just hurting our own ability to respond to emergencies and national security events, they are actively bolstering the oil reserves of our most dangerous geopolitical adversary, the Chinese Communist Party (CCP)”
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“Tried” should be the operative word. Because I’m sure any such bill is DOA in the Senate.
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Nigerian inflation- those who can, leave.
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I’ve let this sit for almost a half of a day with no comments, so …
It’s not exactly a cost of living crisis. It’s more a cost of Nigerian prince’s tricking unwitting Americans into helping them abscond with billions and billions of dollars that their relative can’t get out of the country on his own. 
The bill passed with 113 Democrat votes. But if it passes the Senate, the Biden regime threatened to veto.
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They couldnt stop the vote, and practically had to vote for it. But the Senate can just sit on it and not call a vote, rather than put their members in that same position.
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The Democrats in the Senate may have to pay a price for obstruction. Along the same line as the China oil bill, It will be interesting to see what happens when the Republicans in the house pass separate appropriations bills and the Senate refuses to debate them. Even with the lapdog left-wing media, the optics will not look too good for the Democrats.
We can hope! But it isnt exactly unusual whenever there is split control. House actions are routinely rendered meaningless, unless it’s something with a deadline.
There is a deadline with the appropriation bills. The Democrats and the rinos routinely use the deadline to push through multi thousand page omnibus spending bills at Christmas time.
It will be interesting to see how the Schumer-turtle Cabal game this.
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Fed musings
- FED’S HARKER: WHEN CONSIDERING POLICY OPTIONS, THE FED’S PRIMARY FOCUS IS ON INFLATION DATA.
- FED’S HARKER: IF INFLATION BEGINS TO FALL, THE FED MAY BE ABLE TO LOWER INTEREST RATES IN 2024.
- FED’S HARKER: I SEE SIGNS PRICE PRESSURES ARE STARTING EASE.
- FED’S HARKER: I EXPECT THE UNEMPLOYMENT RATE IN THE UNITED STATES TO PEAK AT 4.5% BEFORE DECLINING.
- FED’S HARKER: IT WILL TAKE SEVERAL YEARS FOR INFLATION TO RETURN TO THE 2% TARGET.
- FED’S HARKER: INVERSION OF THE YIELD CURVE IS UNLIKELY TO SIGNAL A RECESSION.
- FED’S HARKER: HE IS UNSURE HOW FAR THE FED’S POLICY RATE MUST RISE ABOVE 5%; THIS WILL BE DETERMINED BY DATA.
- FED’S HARKER: THE ANTICIPATED INCREASE IN UNEMPLOYMENT WOULD NOT BE RECESSIONARY.
- FED’S HARKER: FED BALANCE SHEET CUTS KEY POLICY COMPONENT AND I’M UNSURE ON WHEN THE PROCESS WILL BE COMPLETED.
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Would it be… transitory?
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What’s it looking to be at for this 6-month block?
My guess is it’ll take several years to get to 2% because there’s going to be a time of deflation to correct for the recent jumps in inflation, before settling on to move forward.
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Can you explain? This doesn’t make sense to me. The 2% target is not a long term average target, it’s an immediate target. Deflation is not necessary to reach the target.
I know it’s the immediate target. And they’re going to overshoot that target into the negative, before finally zeroing in on that 2% bullseye. Some prices, that have contributed to inflation over the past couple years, are artificially high and will inevitably come down to some extent.
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Oh, OK. That’s not exactly deflation, since it’s some prices, not all or even most prices. Used cars, energy, housing – hopefully. Groceries and restaurant prices – probably not.
Costs are rising
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Inflation from rising budgets costs, and how higher rates will increase our national interest expense by 50-100% in the not too distant future.
The magnitude of today’s debt levels must greatly reduce the central bank monetary policy options. This is the central difference between the prior inflationary period and the current one. If the inflation cannot be controlled by interest rate increases, perhaps it cannot be controlled.
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