Business

The markets are prepping for the next massive round of QE.

As I noted earlier this week, NIRP has been entirely ineffective at generating Central Bankers’ desired “inflation.” The ECB has cut rates into NIRP four separate times only to find itself with 0% inflation. In contrast, the Bank of Japan has cut rates into zero once and immediately fallen back into a deflationary collapse.

Indeed, NIRP has even been a dud when it comes to pushing stocks higher.

One of the most striking recoveries in the first quarter was that of Caterpillar stock, which despite reporting what is now a record 40 consecutive months of declining annual retail sales ...

... had soared from below $60 at the February lows, to over $80/share a few days ago as the market bet that China's massive credit-deluge would benefit the heavy industrial company.

• BOJ Officials Are Said to Eye Possible Negative Rate on Loans (BBG)
• Daimler Probe Hits Industry Credibility After Mitsubishi Charge (BBG)
• VW hikes emissions provisions to 16-17 billion euros: source (Reuters)
• Valeant Finalizing Contract With Perrigo’s Joseph Papa as Next CEO (WSJ)
• U.S. split deepens over Putin's intentions in Syria civil war (Reuters)
• As Global Stocks Rally, China's Markets Send More Ominous Signal (BBG)
• Russian forces in Syria fired on Israeli aircraft (Reuters)

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Part 3 of a series on Hamilton: "Hamilton’s Good for the Ten-Spot" and "Alexander Hamilton: Defender of Property Rights."

Just as US equity futures were about to roll over following some very substantial misses yesterday by the likes of Google, Microsoft, Starbucks and a plunge in Visa shares, overnight who came to the markets' rescue but the BOJ, when shortly after midnight Bloomberg reported that "according to people familiar with talks at the BOJ" which is the traditional keyword for a BOJ source testing out the market's reaction, Japan's central bank may "help" local banks to lend by offering a negative rate on some loans.