Kaiseki. (Any views expressed in the below are… | by Arthur Hayes | Mar, 2023 | Medium

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Winter is over in North Asia. The warm weather, sunshine, and early blooming of the sakura announced the presence of Spring. After decamping from the beautiful mountains of Hokkaido, I spent my last weekend in Tokyo.

One afternoon, after finishing a sumptuous lunch, I asked one of the very experienced staff members about a particular aspect of Japanese cuisine that had always puzzled me. My question: what is the difference between omakase and kaiseki? In both circumstances, the chef chooses the menu based on the tastiest seasonal food items. The staff member explained that the entire purpose of a kaiseki is to prepare you for the matcha tea ceremony. The chef is supposed to create a meal that prepares your body to receive the tea.

When you sit down for a kaiseki meal, the destination is known, but the path is not. This brought to mind the current situation vis-à-vis the world’s major central banks, and in particular, the Federal Reserve (Fed). Ever since the Fed started raising rates in March 2022, I have been arguing that the end result was always going to be a significant financial disturbance, followed by a resumption of money printing. It’s important to remember that it is in the best interest of the Fed and all other major central banks to perpetuate the continuation of our current financial system — which gives them their power — so actually cleansing the system of the egregious amount of debt and leverage built up since WW2 is out of the question. Therefore, we can predict with near certainty that they will respond to any substantive banking or financial crisis by printing money and encouraging another round of the very same behaviour that put us in that perilous position in the first place.

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