This should be exciting: the sharp devaluation of the Japanese yen will apparently not initially be averted by the Japanese central bank through massive intervention in view of rising inflation rates everywhere, it is interesting to see how the different currencies relate to each other and are obviously intended to help relieve public budgets through inflation in a devaluation spiral. This is classic beggar thy neighbor policy.
As I always say, Japan at some point will have to face their sad reality, they are only prolonging the agony.
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This is very interesting. I think it is very important for people to understand what is actually happening. This video explains it very clearly. I hope you are able to watch it and understand Japans problem.
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I remember the 80s well. In the US scare mongering books were published claiming that Japan would crush the US and control the world economy. Japanese companies began buying trophy US buildings for high prices, right before a big real estate crash.
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And since then Japan has been stagnant for 40 years, do you think a similar future awaits China? it seems that every country that is about to overtake the United States has the same future ahead of it.
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It's a lot easier to catch up than to take the lead. You can catch up through imitation, but you have to innovate to be in front.
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It sure seemed that way for the past few years, with Xi's self destruction of the economy. Maybe he's learned his lesson, though. It looks like they let Jack Ma out of his cage. Still, if you ask me, China is doomed by its refusal to ease up on its command economy. In the end, they'll always revert to communism.
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I agree with you, adding to the fact that Chinese technology companies are losing quite a few investors and that there is a latent real estate crisis in the country mainly due to the construction in mass of buildings that have been left empty, so it is a perfect breeding ground, we will see what happens.
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They are really struggling, that might be why they are moving away from their currency and seeking a gold backed currency. We will see how much that rocks the world, or if they collapse like their real estate market.
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Thank You
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We will see how many people actually watch and understand what is happening.
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I'll watch later. I am at the dentist now...
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Hopefully they dont have to pull any teeth!
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The little terrorist broke for the 2nd time
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Just jumping in to say @TomK - I really appreciate you keeping us up to date on the world with these news snippets. You must be spending lots of time on analysis!
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Hey, thanks. It is part of my business and my personal passion to try putting things into a broughter picture if there is time. Today I am in Germany, discussing with politicians of the Northrine-Westfalian gov about economic issues over here. Maybe there'll be sth. interesting for us here, too.
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Yes, it's classic.
I thought Japan would adopt a route somewhere at the midline but they are now crossing, or at least proposing to, the boarder line which will bring more harm to their currency and economy.
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152 was the supposed redline, right, or was it 153? I just checked now and it's 153.14. How long can BOJ hold out?
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Mmmmh. Reflating to debase? Let's see what's Chrissie up to later
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Meanwhile, I'm getting ready to enjoy US PPI in 2 hours.
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Best Fiat Menu ever... have a nice Red Vine and enjoy it with some good music (tomorrow Mark Knopfler will publish his new album, if You lile this style)
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I'm an old Dire Straits fan from way back. I didn't realize he's still putting out music. He's a very good guitar player.
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You would love it. He's a great narrator. It's a whole universe to discover (also live concerts on YT (best Taormina 2013)). I think he made at least 7 more albums
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I will give them a listen. I always liked his music.
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My favourite song of this era:
Not rate hike but they can intervene again directly selling dollars. There is talk about 155 being the line on the sand for intervention.
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Could be, yes
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A quick Google search indicates that Japan has 1.29T in reserves (valued in USD). A mere drop in the ocean, like Bitcoin’s market cap!
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And what do You conclude? Tokyo is Asia's capital hub
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The apparent intent for a managed decline of the Yen may morph into a steep decline. 1.29 would not be enough to reverse this and so a coordinated attempt* with other central banks may be in the pipeline at some point.
I’d be grateful if you’d elaborate on the capital hub point. I suppose raising capital isn’t the challenge, but allowing the proper (i.e. capitalist) allocation to take place is.
*Central banking at the national level is bad. Cross-border central bank coordination is worse; the temporary show of market power eventually leads to greater market distortions.
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Tokyo is the starting point for carry trades. above all, it is the base of the Asian euro-dollar area. The Europeans live existentially from the capital raised in Asia in Tokyo and then invested in the eurozone
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Ah, the carry trade! So, if Japanese rates increase it’s not just a problem for Japanese corporations but Europe too. What a wonderful integrated mess!
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Yep
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And what do You conclude? Tokyo is Asia's capital hub
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