Forex Myth Buster: Forex Demo Accounts

You all know them; most of you guys used them and you still wonder why you have failed miserably as a forex trader. I mean seriously, think about it. 98% of all forex traders fail; this roughly equals the same amount of new traders who fell for the forex myth that you can learn how to trade in a demo account.

Most of you guys are absolutely clueless about the forex retail market and the dirty business behind it. You are ignorant about reality and arrived at forex through some shitty marketing campaign, clicked on a dumb banner hoping your next destination will be wealth or had some moronic friend refer you to the bucket-shop broker they use for a small cut of the profit; no not the profit you will never see, but the profit your forex broker will generate from spreads higher than Mount Everest.

I don’t care what you have heard or what pathetic, self-proclaimed guru has told you about demo accounts or even worse what your forex mentor has served you in a forex course which you have paid for. Honestly, most of you forex failures deserve nothing better than to be scammed out of your tiny deposits and blow your accounts.

What’s that? I am too harsh or too mean?

Get the F-Bomb out of here; you are not cut out to be a trader.

Have you ever tried to locate two brain cells which are functioning and fire up a synapses in your illusion driven brain? Why would so many retail forex brokers offer and promote demo trading with high deposit amounts?

Those of you who have not given up, ran away and cried to your mom about the big bad Rogue Forex Trader, the answer is rather simple. The creation of a false sense of knowledge and accomplishment in order to encourage deposits which you will lose faster than it takes me to bang your hot girlfriend’s brains out while you struggle to increase your money so you can afford a cheating whore like her.

At least she is banging hot and as you read this she may be screaming my name while I knock that dust of forex trades. As funny as it is to me, as pathetic it is to you. Sad, but true story and you will never get anything besides disappointment until you stop following popular advice and decide it is time for you to bang your girl and not anyone else.

her pussy since you did not cut it. Interesting, you failed to give this sex-kitten orgasm after orgasm just as you have failed to generate profit from your

The only way you can learn how to trade forex, or any other asset class, is by actually trading. This means placing real trades in a real account with real money. No trading takes place in forex demo accounts and therefore you are not learning how to trade.

How many times have you heard tales of failed forex traders who did great in demo accounts for several months and once they went live their girls screamed ‘Just like that Rogue Forex Trader, you know how to hit it right!’?

That’s because they felt the wrong sense of accomplishment in a demo account and once they went live they faced reality. Those who think you can learn how to trade in a demo account are the same people who think masturbation prepares them for sex and the more they masturbate the better they will get at actually having sex. I mean there is a reason why their girlfriends are on their knees in front of me while I pip my forex portfolio.

Forex myth busted!

PS: The hotties in the above picture are Kiara Mia and NinaMercedes. Check them out over at Brazzers!

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Rogue Forex Trader Counter AUDUSD Call

Fellow forex traders, accept my apologies for my month long absence. Being a rogue forex trader sometimes means you will fade into the shadows and do some heavy research especially if you plan a longer-term move so I have been busy doing just that. You know, now that I think about it; don’t accept my apologies as there are none!

You want to be a forex trader?

Everyone does, but only a few select will ever join the sacred ranks of a true forex trader. Since you are here reading Rogue ForexTrader, there may be hope that you will manage to reap a few pips alongside this outpost I have created.

You may wonder what I have been researching the last five weeks and to be honest it is none of your concern so stop bothering finding an answer. I am not here to tell you about my life, I wrote today in order to counter the research and analysis conducted by Excalibur Funds Management Pty, a global macro alternative asset manager out of Sydney. I love Sydney, I love Australia and I love the women there.

When it comes to Excalibur Funds Management I have to slap them with a dislike in regards to their latest call on the AUDUSD currency pair. Excalibur Funds Management launched a new hedge fund on July 17^th which is an Australian Dollar only strategy and basically means the fund only trades the Australian Dollar. According to Matthew Harper who is a principal as well as trader over at Excalibur Funds Management, institutional investors have placed in access of $200 Million with this specific hedge fund.

Excalibur Funds Management, which additionally runs a G-10 currency strategy, targets an annual growth rate between 10% and 13% per year with a maximum loss per month of 2.5%. This is by no means a solicitation or advertisement for the company. I just want to give you guys some very basic information so you know who released the below analysis.

Excalibur Funds Management calls the AUDUSD down to 0.7500.

They did not give a specific timeframe for this call, but they think the AUDUSD currency pair will tank severely from here citing a Chinese slowdown which they predict will reach 5% GDP. Australia did depend on Chinese growth as Australia is the world’s largest exporter of iron ore and heavily depends on the commodity sector. The Australian Bureau of Resources andEnergy Economics estimated that commodity exports would total A$177 Billion, down A$9 Billion from its previous estimate.

According to Excalibur Funds Management, which conducted their analysis with the assumption the Reserve Bank of Australia will cut interest rates down to 2.00%, further noted that should Australia enter a recession as they predict will happen in 2015 with a 30% chance that the AUDUSD currency pair could fall down to 0.6000 which would be the lows of 2008 as the US sponsored financial crisis unfolded.

Excalibur Funds Management further reasons their prediction with treasury yields between the Australian 10-Year Notes and the US 10-Year Notes. The margin between those two are just above 100 basis points and they predict it will shrink further until the margin will converge. The closest the Australian-US margin came to convergence was in 2005 and at that point the AUSUDC currency pair traded at 0.7500.

Matthew Harper, who was formerly employed by National Westminster Bank in Sydney, runs the fund together with James Wallace who was a former Citi Group trader. I have to admit, being a professional trader for over a decade and around financial markets for almost two decades that neither National Westminster Bank not Citi Group are great trading outlets. They are banks and should stick to banking and they are definitely not places where excellent forex traders are groomed.

When banks, or former bank employees, think they are smart enough to run hedge funds bad things usually happen. Banks belong in the dumb money camp together with mutual funds and hedge funds are a smart money trading vehicle which means they are not a natural fit. More and more dumb money trained and educated traders launched hedge funds which explains while the average performance dropped as more and more hedge funds are not pure anymore, but have been infested with dumb money untalented traders and managers.

Given that Excalibur Funds Management targets a growth rate of 10% and 13% per year, which means just below 1% per month; while they allow a 2.5% monthly maximum loss makes this a hedge fund which I consider a bad investment. That is my personal opinion and I am not here to tell you where to place your money, I am here to discredit an analysis conducted by a firm which Rogue Forex Trader disagrees with to the max.

Excalibur Funds Management calls the AUDUSD currency pair

down to 0.7500.

Rogue Forex Trader calls the AUDUSD currency pair back up to parity.

Now you want to know my counter argument as of why Rogue Forex Trader calls the AUDUSD currency pair higher from current levels and eventually retest parity, especially after I mentioned the cornerstones of Excalibur Funds Management and their reasons why they call the AUDUSD currency pair lower?

You won’t get it, that’s part of being a rogue forex trader. You can do whatever you like with what you read here, I state my opinion and don’t need to give you reason as of why. You can ignore it and follow those who give you reason as I earn pips from my forex trades regardless if you believe what I write or not.

See, what you guys fail to realize is that true forex traders trade their own strategy because they know it works and have a track record plus lifestyle to back it up. They don’t trade so others understand and agree with it. Those forex traders and management firms who have to be out there and market their case are usually the ones you should stay away from.

PS: The hottie in the above pictures is Aletta Ocean.

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US pathetic threat to Russia

As I am scanning my 16 screens for the next forex trade I come across a slightly outdated, but yet relevant new stories about our favorite fugitive; Edward Snowden. Yes, he is still stuck at Moscow’s Sheremetyevo airport in the transit zone which Russia regards as neutral territory. He has not been seen in public since June 23^rd, but he did have a meeting with human rights activists.

Hi lawyer Anatoly Kucherena stated that Snowden has applied for temporary asylum until the logistics of his future travel have been resolved. The US revoked his passport, but Bolivia, Nicaragua and Venezuela have offered permanent asylum to Snowden. The problem is that none of the countries can be reached via direct flight and Snowden is afraid that the US will force allies to restrict a plane suspected of carrying Snowden from entering their airspace as was the case with the Presidential plane of Bolivia.

Another fear is that a plane suspected with Snowden on board will be diverted and forced to land at an ally air force base where he can be detained. Kucherena did not rule out that Snowden may apply for Russian citizenship in order to enjoy protection there and to be honest that seems to be his best option as it does not take much to apprehend Snowden or worse in the three Latin American countries which offered him refuge and without causing too much damage.

In Russia he would be safe and secure and could leave a free life. Plenty of Russians have offered him money and shelter, one woman offered to adopt him and another ex-Russian spy offered to marry him. There you go Snowden, being married to a very hot and sexy former Russian spy and enjoying life in a great country with her; take it or take it as it is a no brainer.

Should Snowden be granted a temporary asylum he would be free to work and travel across Russia for the next 12 months and Kucherena stated that Snowden applied for temporary asylum rather than political asylum as the process is much faster. Russian President Vladimir Putin, one of the smartest politicians of modern time, said that Snowden could remain in Russia if he would stop leaking confidential information which is damaging to the US.

The US wants Snowden to be returned and face espionage charges which the Department of State calls a fair and just trial. I am not sure too many are convinced and Snowden fears of torture and death are not too far-fetched.  He did what he did was right and exposed internal as well as external spy programs which the NSA installed and executed which invaded not only the privacy of its citizens, but also of its closest allies.

The US is desperate and now barks up the wrong tree while threatening that Russia would risk long-term problems with the US unless Russia does as the US begs and complies. This empty and moronic threat made me laugh as I am looking over the AUDNZD H1 chart and scan my next entry point. It is funny how the weak threatens the strong and thinks they can achieve something with their threat. I am sure every intelligent person in Russia finds the threat equally amusing.

Those who scratch their forehead right now and look like a complete motard wondering what motard stands for, here are a few pointers which may guide you to the amusement destination humans with an IQ above 75 frequently enjoy:

• Russia together with China are the new global super-powers and you can’t mess with this one-two punch which together with Brazil, India and South Africa form what is collectively known as BRICS. BRICS sticks together and forms a strong and powerful foundation with plenty of economic, financial and military power to take out any nation which threatens their borders. Furthermore India and South Africa are members of the Commonwealth of Nations and the head of the 54 independent countries is Her Majesty Queen Elizabeth II which will stick closer to her agenda than to support a former colony which rebelled against the British Empire.
• The US has been collapsing in all important areas; economy, finance, military. Allies have abandoned the US, but it appears some EU members, at least four, still nurture ties with the collapsing American empire and decided to assist the sinking ship. Eventually they will pay for their pathetic stupidity as no bad deed goes unpunished in the political space. Countries take note and the day will come when those countries need something at which point they will be politely bend over for an anal response.
• The US owes Russia billions of dollars and therefore is in no position to threaten or negotiate anything. Should Russia feel offended enough they will get BRICS to sell US Treasuries in the open market and stop financing the US basic needs which would result in total catastrophe and collapse of most basic services across the US which is what Washington is aware of and therefore all they can do it bitch about the situation; a barking dog does not bite and the US barks quite a bit and pisses on the wrong tree.

PS: The hotties in the above picture are Jessie Rogers and Molly Cavalli.

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Northern Colorado Secession Plans

I know it has been a while, but the last two weeks I was extremely busy with some rogue forex trading which I needed to focus on in order to keep everything intact. The life of a rogue forex trader can be extremely rewarding; having said that there may be times when you guys will miss me and my rogue forex trades here as more pressing matters require my full attention such as my trade set-ups for the next few weeks.

While I was analyzing charts in order to find the next rogue forex trade which I will share with you guys on Monday, I did have some time to stumble across a very interesting article which I could not keep to myself. It has to do with Colorado or rather Northern Colorado which wants to become the first state to secede since West Virginia seceded from Virginia back in 1863 during the Civil War. This was 14 years before Colorado even joined the union.

Since then there has been no secession in the US, but it was only a matter of time. Northern Colorado is serious about it and a total of eight counties are in secession plans together. I am rather excited about this, but do not get too excited forex traders. I doubt they will have their own currency and merely adopt the US Dollar as their currency which means now new currency crosses to trade.

Which eight counties want to form the 51^st state?

• Kit Carson County
• Logan County
• Morgan County
• Phillips County
• Sedgwick County
• Washington County
• Weld County
• Yuma County

There may be two Nebraska counties who would like to join the new state as well as two Kansas counties which means that there could be up to 12 counties from three different states who would like to secede and form their own state which they can govern free of socialistic left-wing propaganda.

Secession talks are usually heavy in Texas which continues to see an increase in secession wishes from the US while Austin would like to secede from Texas. I think this shows the extreme dissatisfaction of the growing general public with the current system and those who understand the US constitution want to break away from Washington and be allowed to operate their state for their constituents and away from left-wing idiots.

The counties who wish to form their own state represents the rural areas and want to fight in order to preserve their way of life, which given the abuse of freedom as well as the US constitution over the last five years makes perfect sense. I applaud the people who have created the idea, fight for it and stand up for it as well as those who support it.

Weld county commissioners Sean Conway, Mike Freeman and Douglas Rademacher are leading the secession coalition and want to put secession on a ballot so voters can decide if they are on board with secession and in order for the process to move forward. US Representative Cory Gardner, a Colorado Republican, also support the coalition. After voters agree on secession from Colorado, the Colorado General Assembly needs to agree on it and give the counties the green light. The final hurdle lies within the US Congress and their final approval.

The process is lengthy and most think impossible to achieve, but the coalition is already mapping the borders of the new state and are 100% serious about this matter. I can only hope for the citizens of the counties who want to do the right thing for them and their lifestyles that they actually secede from Colorado.

I will continue to follow the developments out of Colorado, more out of personal interest than business interest as it will not have any impact on forex markets. I think over the next decade we will see more and more secession talks and the eventual break-up of the US as we know it now. At that point forex markets will take note as we may see a complete split of the US over the next three decades into multiple independent countries.

PS: The hottie in the above picture is Gina Lynn.

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Where is Edward Snowden?

Alright, by now everyone knows who Edward Snowden is and for those who still scratch their head about his now infamous name: Where the hell have you been!? Edward Snowden is the 30 year young NSA whistle-blower who made the world aware of two top secret spy programs; one domestic and one foreign. His betrayal to the US intelligence community has not only angered top officials, it also initiated a barrage of events which soured diplomatic relations between the US and a host of countries such as China, Russia and Ecuador.

Edward Snowden’s revelations rank among the biggest security leaks in NSA history, and before this system administrator joined the ranks of the NSA as a contractor employed by Booz Allen Hamilton he was also a contractor for the CIA. He is a high school drop about and former US Army Special Forces recruit, but never completed training.

He has made the public aware of the interception of phone metadata, which is basically data about data and in this case the phone numbers as well as length of phone calls without the actual content, as well as well as two internet surveillance programs; PRISM out of the US and Tempora out of the UK which he knew about as the UK shares information with the NSA.

He is now a fugitive and charged under the Espionage Act. The charges against him include: theft of government property, unauthorized communication of national defense information and willful communication of classified intelligence with an unauthorized person. Eric Snowden made the global public aware of the surveillance programs in an interview with UK newspaper The Guardian this month.

Snowden conducted the interview from Hong Kong where he sought security from US officials. He remained there for a few weeks, but grew uneasy of his personal safety which led him to seek assistance from WikiLeaks and their expertise in this delicate matter. He especially sought out their legal assistance as WikiLeaks founder Julian Assange is being sought for extradition, but he found asylum and currently lives in the Ecuadorian embassy in London where he enjoys Ecuador’s protection.

So, where is Edward Snowden?

He boarded a plane in Hong Kong and flew to Russia where he is believed to currently be in a transit zone at an airport in Moscow. The US begged Russia to extradite him, but Russia has no extradition treaty with the US and Russian President Vladimir Putin stated that Edward Snowden is free to go where he likes. President Putin also stated that Snowden as not entered Russia and that Russia has not contracted him. While Russia will not extradite him, President Putin said he hopes he will leave the country soon.

The US has accused China that Snowden was hired by Chinese intelligence officials in order to infiltrate the NSA through Booz Allen Hamilton which was dismissed by China as pathetic and diplomatic relations tanked. The US has acted in a childish way and does not need to wonder why global super powers have no intentions of cooperating or assisting the US in their issues. The bad seed the US sowed when others were less powerful come home and haunt the US.

Russia has no intentions to assist the US either, but is aware of the exact whereabouts of Edward Snowden. Since the US has decided to arm Syrian rebels and angered Russia with their interference in matters the US has neither right nor power it is only natural that President Putin declines US request in the highest political manners. The US is mad and once again displays its idiocy when it comes to foreign relations.

Edward Snowden is rumored to board a plane to Cuba from where he will be headed to Venezuela before finally arriving in Ecuador where he will seek asylum and his request will most likely be granted. The US revoked Snowden’s passport and Ecuador has issued refugee papers to Snowden in order to ease his travel issues. It is believed that Ecuadorian officials are currently working on finalizing his travel plans as Snowden awaits confirmation in the transit zone of a Moscow airport.

The US has now managed to piss of China and Russia with their accusations and as the US saying goes: ‘Don’t bite the hand that feeds you!’ the US will feel further fallout from their actions. The US has treated other countries like a piece of dirt when they were powerful and others weak; now the tide is turning and the US has a hard time realizing this.

Edward Snowden, thanks for providing great material for a post right here at Rogue Forex Trader. May your travel plans go as scheduled so that you arrive in Ecuador where you can live the rest of your life looking over your shoulder which is the sad reality. Thank you for making all of us aware of what is going on as you can rest assured you have been the cause for a deterioration in diplomatic relations between the US and the new super powers of this world while what may or may not happen in Ecuador has the potential to cause a political scandal.

PS: The hottie in the above picture is Alicia Secrets.

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Bernanke opened Pandora’s Box

As I entered my EURUSD short positions at 1.3400 and GBPUSD short positions at 1.5700 earlier this week I was well aware of the fact that Ben, the Septic Tank, Bernanke and his 12 plumbers will start their Fed meeting on Tuesday and that the FOMC will make a statement Wednesday at 1400 hours New York time followed by a press conference 30 minutes later. It was obvious that Bernanke would spill some feces as soon as he starts his speech which has named him the nickname ‘Septic Tank’ to start with.

When quantitative easing, or QE as it is commonly known, started the Fed had no exit strategy. QE2 followed QE and QE3 followed QE2 while a final adjustment was made which many refer to as QE4. After QE4 was announced which amounts to a total of $85 Billion of wasted tax payers money each and every month the Fed had to think about some sort of guidelines as to when they will be forced to phase out their socialistic market manipulation and eventually reduce it down to $0.

The sole reason for the stronger than anticipated bear market rally was QE which artificially propped up markets and dumb money investors happily opened their watering mouths to catch all the feces Bernanke decided to drop into them. Dumb money swallowed the still steaming feces with a smile on their face and kept buying US equities which resulted in all-time highs for major benchmarks. There was a severe disconnection with the real world and as history has shown us time and again such a disconnect will correct itself later rather than sooner.

Bernanke then announced one day that the Fed will remain committed to throw away tax payers money until the unemployment rate will drop to below 6.5% and the economic outlook will remain stable. Since the 6.5% unemployment target was and remains unachievable to the point that even dumb money realized this it essentially meant that the Fed will defraud tax payers without an end in sight.

After the S&P 500 eclipsed past 1,650 and everyone was talking about how you should move into equities smart money understood it was the end of the rally. Bernanke than found out that he is essentially fired after his term expires and then decided to make statements that the Fed is considering to adjust QE. Bernanke was able to do so because the US economy was in the eye of the storm and economic data, especially unemployment figures, painted a somewhat better picture.

After Bernanke rattled the markets with his statements dumb money actually wanted bad economic news in order to keep the Fed in financial markets and continue their idiotic interference. Each economic data point was anticipated to show a US economy in bad shape and dumb money cheered each time they received worrisome economic news. This perversion allowed US equity markets to not contract as much as their European as well as Asian counterparts.

During his press conference yesterday Bernanke stated that the Fed may start to alter QE starting this fall without using the word ‘taper’ and called a full end of QE by the end of H12014. That statement was equivalent to opening Pandora’s Box. Financial markets started to correct and smart money portfolios increased in value as dumb money will be left holding the bag just like in 2009 after they dropped 50% or worse.

Some dumb money segments translated Bernanke’s comments as an overall improvement in the US economy and therefore cheered the end of QE. In reality the US labor market started to crack eight weeks ago and overall economic activity is closer to contraction than consistent expansion. Despite what Bernanke said, which was nothing more than an uneducated guess powered by hope about the state of the US economy by mid-2014, the Fed under a new chairman will not be able to taper or adjust QE.

Since he specifically mentioned this fall and he will still be at the helm of the Fed he may reduce QE by $10 Billion per month to $75 Billion just to make his prediction come true. This fall the US economy will flirt with a recessive performance and his reduction will come at the wrong time. After he passes the torch to the next Fed chairman who may end up being Janet Yellen, the first female Fed chairman, the only thing that will remain of Ben, the Septic Tank, Bernanke, is the fallout of his moronic Fed policy which dumb money praised over and over again.

Plenty of the dumb money camp claim that Bernanke tried to prepare financial markets and make the job of the next Fed chairman, or chairwoman, a bit easier. That is utter crap as he made sure he could do all he can to make the job even more challenging for his successor. Given the fact that traditionally every Fed chairman was absolutely unqualified to hold that post it will be at least entertaining to witness pathetic retards make monetary decisions which will impact the economy.

Either way, I closed my short positions for profits of 200 pips as well as 275 pips respectively and those who followed my rogue forex trades were able to do the same. 

PS: The hottie in the above picture is Breanne Benson.

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Abenomics, JGB’s and the Japanese Yen

Sometimes it is hard not to laugh and the stupidity of voters and how they tend to make every effort to fulfill the basic principles of insanity. On September 26^th 2006 Shinzo Abe became the 90^th Prime Minister of Japan by a special session of the Japanese upper and lower house referred to as the National Diet. He was the youngest Prime Minister elected since World War II and resigned less than one year later on September 12^th 2007.

During his eleven and a half months as Prime Minister he introduced what is now known as Abenomics to the Japanese economy which backfired and was nothing more than a counter-productive move which gave Japan more of the same and rightfully so. Japan decided to bailout its massive financial system as the Japanese were clouded by pride and stated that no Japanese financial institution will fail. The Japanese government bailed out its failing banks and welcomed an area of recession, depression and deflation from which it has yet to recover 14 years later.

After his resignation a string of other Japanese Prime Ministers left their stamp of failure and resigned within less than one year after winning elections. As the Japanese economy endured recession after recession and the Bank of Japan slashed interest rates down to zero in an idiotic attempt to force Japanese savers to take their money out of banks and invest as well as consume, the Japanese Yen grew stronger as it was regarded as a safe haven and used as a carry trade.

Japanese exporters grew disgusted with the strength of their currency and the Bank of Japan vowed to come to the aid of the only function sector of the Japanese economy; its export sector. In order to make Japanese products more competitive from a pricing perspective they adopted a weak Japanese Yen policy.

Abenomics failed terribly, but Japanese voters worked hard to display their utter lack of memory and on September 26^th 2012 Abe was elected Prime Minister again. Yes, you guessed it right; with his electoral victory he brought back Abenomics. This time he made a pledge to turn things around and kick-start the Japanese economy with Abenomics. Same approach as six years ago based on hope for a different outcome equals insanity.

The Bank of Japan, you know the ‘independent’ one, announced a massive QE program on April 4^th worth $1.4 Trillion over the next two years. The amount of complete lack of economic understanding and fiscal as well as monetary stupidity only rivals the Ben, the Septic Tank, Bernanke out of the US Fed. The Japanese Yen started to tumble and the USDJPY currency pair moved from below 78 to above 103 in less than six months.

Japanese exporters were extremely pleased, but things have changed rather fast. The Japanese Yen experienced a sharp reversal trade and collapsed back down to 94 just as dumb money analysts called this currency pair to 110 by the end of 2013 and 120 by the end of 2014. Rogue Forex Trader calls this pair to end 2013 between 88 and 92. All other major Japanese Yen crosses experienced the same fat in the forex market.

The fall and rise, yes it was just like that and not the other way around; of the Japanese Yen is not even the biggest problem for Abe, the Bank of Japan and their moronic economic policy. The forex market already mocked the Bank of Japan and their ultra-short term approach to a decade old problem and shoved their quantitative easing campaign down their anus.

Even worse for Japan and as a direct result of Abenomics is the performance of Japanese Government Bonds or JGB’s. Abe and the Bank of Japan hoped to lower interest rates and force consumers to spend their money in order to generate economic activity and invite inflation. The 10- Year JGB traded below 0.32% and remains historically very low especially if compared to other sovereign debt.

After QE was announced it jumped at some point above 1.00% before settling in the 0.80 range. This is just another example why you do not operate based on hope. The Bank of Japan vowed to purchase 70% of new issued debt every month and hoped long-term interest rates would drop even lower. It works different in the real world and long-term interest rates rose which starts to give Japanese consumers even less incentive to spend. Abe and the Bank of Japan achieved the exact opposite of what they desired.

In order to top things off, Japanese Banks already unable to earn a decent return started to dump their holdings and shed 10.8% in April alone and applied further upward pressure to yields on the JGB. Additionally they have hiked prime interest rates in order to cover the shortfall in earnings from JGB’s which now offers cautious Japanese consumers another reason to not spend money.

The rise in interest rates will now impact Japanese debt and further hammer the Japanese economy and could initiate a death spiral of bond selling which will allow yields to skyrocket and interest rates to rise even further and ensure deflationary pressures will haunt the Japanese economy. Japan is the most indebted nation in the industrialized world and is proud to have a record 230% debt-to GDP ratio. The Bank of Japan took what idiotic steps they could in order to try and control the JGB market which backfired severely and is about to do so even more drastically.

This is a perfect example why governments as well as central banks should not interfere with financial markets and the economy. All the Japanese problems can be dated back to the massive financial bailout of their financial system back in 1999. This utter socialistic move destroyed Japan and continues to haunt them. The US made the exact same mistake in 2008 and will face the same outcome. Those who disagree simply fulfill the definition of insanity just like Japanese voters did in September 2012, US voters in November 2012 and so many others.

The Nikkei 225 entered a bear market last week and dropped over 20% in less than four weeks and implied volatility on JGB’s maintained a level above 5% for several trading weeks while the Japanese Yen began to strengthen. After it is all said and done, Abenomics was the same failure as before and Prime Minister Abe as well as the Bank of Japan have accomplished the exact opposite of what they intended.

This is what happens when you vote unqualified individuals into decision making positions and allow their lack of real world comprehension and amusing moronic approach infested with socialism interfere in what should be a free market. The more you decide to mess with a capitalistic idea the worse the impacts will be. Sometimes the economy will revert into a recession and the best policy is to allow the financial system to work as it does because it works perfect as the Abenomics – Japanese Yen – JGB example displays.

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