Original source
Because having legal authority to buy corporate bonds, ETFs and REITs, in addition to everything else the Fed now buys, is apparently not enough to crush, mangle and suicide its currency, the BOJ is now considering adding yet another "asset" to its cocktail of eligible securities for purchase: those which Buffett once declared weapons of mass financial destruction - derivatives.
From Bloomberg: "Bank of Japan governor nominee Haruhiko Kuroda said that the central bank will consider buying derivatives if he’s confirmed as governor and signaled a readiness for a quick expansion in monetary stimulus. “We will carefully consider such a proposal,” Kuroda, the Asian Development Bank chief, said in response to a lawmaker’s question in his second Diet confirmation hearing today." This development makes intuitive sense: central banks are desperate to destroy their currencies in the fastest and most spectacular fashion, and what better way than to have your central bank load up on the riskiest of "assets", which would be one brief downturn away from wiping away all the of the bank's capital and then some, and thus sending the currency into an even greater tailspin - just the outcome sought.
After all, in the new normal, it is he who "collateralizes" their currency with the most toxic biohazard, that wins. The Bank of Japan may have just taken a commanding lead over everyone else. The question now is: how soon until Bernanke follows suit and demands that the Fed be allowed to monetize equities, HY bonds, and other E-Trade baby specials.
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