Category: Market Internals

Money Printing – Made in Japan

The Japanese are turning the pumps on once again!  I'm trying to get a handle on total money printing. I've built charts showing combined FED, ECB and BoJ assets in dollar terrms. The thing is, with the yen collapsing on the announcement of more Japanese printing that hasn't occurred yet, this pump measure is falling sharply. This new pump measure seems very effective as a 10-day leading indicator for the S&P 500 in recent months.

110214totalpumpsmall click chart to enlarge

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Weclome to the Chartateria

Some interesting charts this evening showing relationships between central bank balance sheets, foreign exchange rates, and the S&P 500.

bojecbpump

click chart to enlarge

The Money Printing Pump chart I show frequently does not factor in the Japanese printing. This chart of the ratio of Japanese central bank assets to European central bank assests shows how the S&P pullbacks align with pauses in Japanese printing.bojfeddollaryen

click chart to enlarge

The long-term relationship between dollar yen and relative Japanese and US money printing remains intact. The Japanese are printing faster than the US, hence their currency is falling. A light pause in that ratio recently has seen a pullback in dollar yen.  

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