Prime Minister Abe has the Bank of Japan in a cage, like the gimp from Pulp Fiction, forcing them to conduct perverse acts of monetary policy. He has ordered them, emperor style, to create inflation–out of thin air, mind you.
“The statement must say clearly that 2 per cent is the target. That would lead to fundamental changes” in the way it guides policy, he said.
I want you to appreciate the candor of Mr. Abe, for he is intent on making investors in Japan a great deal of money. You’re all familiar with “The Bernanke put”, correct? Well, now there is an even bigger put in Japan, in order to reverse the endless tides of recession that’s been plaguing Japan since the 1990’s.
Will it work now? Will the new mantra of “inflation by any means necessary” lead Japan to a new era of prosperity?
The answer is decidedly yes. Japanese stocks are the cheapest in the world and Abe is fixed on seeing that reverse.
Some of the internets are worried about the downward spiral in the Yen, exclaiming “OMG, it’s sooo gonna stop going down so fast, lol, LMAO, SMH.” Ignore these people are being retarded, incapable of deciphering the difference between a poached egg from one that is soft boiled.
On a much longer time horizon, the Yen has significant downside from current levels. Dare I say, it can drop another 20% and no one would think anything of it.
Hence, “The Fly” is long HMC and it is his favourite pick for 2013. He is also long SNE and would purchase “the gentleman’s ETF”, DXJ, if he was in the market for a more conservative/diversified approach to his thesis trade on Japan–which he is not at this juncture in time.If you enjoy the content at iBankCoin, please follow us on Twitter