BoJ Statement 4-24-2019

The Great Financial Unknown is now upon us. After 10 years of Quantitative Easing, the European Central Bank (ECB) in Europe owns 40% of the national debts in the EU and it can neither sell them nor stop buying without creating a Panic in Interest Rates. Likewise, the Bank of Japan (BoJ) owns between 70% and 80% of the ETF bond market in Japan. The Bank of Japan confirmed it is ending free market determination of interest rates for the municipal level and that they “will not require any procedures such as auction as the method of determining lending conditions.”  today it may introduce a lending facility for its exchange-traded fund buying program, which would allow it to temporarily lend ETFs to market participants.

4. Introduction of Exchange-Traded Fund (ETF) Lending Facility
The Bank will consider the introduction of ETF Lending Facility, which will make it possible
to temporarily lend ETFs that the Bank holds to market participants.

QUESTION: Mr. Armstrong; I assume you read that Mr. Nagai  has confirmed what you have been saying that the central banks have destroyed the bond markets. I must confess, his comments have finally struck a vein in our senior management. I have been trying to explain your view to them but nobody wanted to think anything would ever happen. I managed to get a seat in Rome. Does your report cover the prospects of what the future will be shaped by? I do not think people understand the seriousness of what you have been saying. They all watched your interview in one day. That was remarkable.

HA

ANSWER: I know. This is a very serious topic. Far beyond what people understand . This is why the capital flows are going crazy pouring out of Europe into US Equities. I do not think people comprehend that we are staring a crisis in the eyes that is so fundamentally changing with regard to how the world monetary system functions, this is why I said bring your thinking caps to Rome. We are stepping into the great financial unknown – we are entering something where no economic theory has ever gone.

QUESTION: Will you be covering BREXIT and the May elections since Nigel Farage will be speaking? What about your forecasts on civil unrest? It is really starting to surface here in Europe.

Thank you

MU

ANSWER: Yes. Politics is critical because this is reflecting the shifts in confidence that will drive the markets. We are facing a major capital movement that will take the form of a contagion. The civil unrest is rising everywhere. The polls in France now show that 80% of the French people support the Yellow Vest movement demanding the resignation of Macrone. We certainly live in interesting times. We will be focusing in on the forecasts the computer has laid out into the next couple of years.