The "world has changed" moment of the week is Japan opposition party leader Shinzo Abe's call...

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mickmars Comments (1083)
 
Right. Inflation is the answer to all of our problems.
16 Nov 2012, 10:21 AM Reply Like

schatzl Comments (391)
 
Though they're stuck in deflation. They're in double digit QE programmes soon and it hasn't helped one dot. They're just piling up more debt. I wonder how they envisage ever getting out of that quagmire.
16 Nov 2012, 10:46 AM Reply Like

bearfund Comments (1537)
 
There is no deflation. See the data for yourself at http://bit.ly/U4ij4E. The overall price level as measured by the government has been within +/-2.5% of the same level for the last 20 years.
16 Nov 2012, 01:15 PM Reply Like

Michael Clark Comments (7799)
 
Only one way out of the quagmire: higher interest rates, force the bad loans out into the open, and crank up the default machine. The big burn down we've been trying to avoid MUST happen to slash and burn the playing field so we can start over again. People who made bad loans should pay for them, not be protected by the government (with taxpayer money) to keep the poor protecting the rich from bankruptchy.
18 Nov 2012, 11:05 AM Reply Like

divinecomedy Comments (421)
 
Japan should be close to hyperinflation now. If I remember my history correctly, when politicians put pressure on central banks to print, you can pretty much use currency as toilet papers after wards.
16 Nov 2012, 10:58 AM Reply Like

winningtrader Comments (2253)
 
I think this will happen in Japan, or at least very high inflation. The YEN is toast. It is amazing that anyone is really willing to keep that crap. It will lose at least 80% of its purchasing power over the next 10 years - 5 times higher prices (that may happen faster actually).
16 Nov 2012, 03:34 PM Reply Like

chopchop0 Comments (1646)
 
Isn't most of their debt held by their own people? Isn't that whats been keeping a lid on this for so long?
18 Nov 2012, 10:57 AM Reply Like

jhooper Comments (4659)
 
Yes. Its called Uchi Soto. It means the Japanese will go to the mattresses for Japan. The will bleed themselves dry in order to avoid Japan loosing face. Of course, little by little, drop by drop, they get weaker and weaker and weaker. In such a situation, an economy just doesn't implode, it just makes everyone's life a little more austere as each year passes by. What they don't see is Bastiat's unseen. They don't see the wealth they could have had, if they had chose not to let gov price blind policies waster their labor on low return projects like over priced bullet trains or gov run utilities. They do see the train, but what they don't see is a bigger house or more travel or better education or better health care. Its the same specious reasoning that goes on in the US and Europe that is leading us into our own austerity. Its the sort of poverty you get when the gov educates the populace. It educates them to be slaves.
18 Nov 2012, 04:14 PM Reply Like

mdmrjsds Comments (502)
 
Not to worry. MMT assures us that sovereigns can never default. LOL Unfortunately, it doesn't have any answer to the question of how much money to create, and can't have an answer. Why? Because the theoretical underpinnings on which it is based won't allow that. As long as the basis of a financial system is soft money, as opposed to defined money, there is no way to determine the correct level of money creation. And so we see situations such as this in all the developed economies, with Japan the leader of the pack.

Perhaps we'll see a global equivalent to the European situation, where international institutions, funded in part by Japan itself, will step in to provide funding for Japan. More unintended humor. This is like a Keystone Kops episode. Except that it hurts so much while we're laughing.
16 Nov 2012, 11:24 AM Reply Like

The Hammer Comments (2986)
 
gold and silver. The madness goes to unimaginable levels before this ends.
16 Nov 2012, 12:00 PM Reply Like

igetsit Comments (21)
 
The real inflation is coming when all of the workers in China start to revolt and ask for higher wages. Even if they ask for just an extra .05%, its a lot of workers and a lot of costs that need to be passed on.
16 Nov 2012, 12:07 PM Reply Like

The Hammer Comments (2986)
 
wages in china are already going up 20-30% annually albeit from a much lower base.

the bernank should finance modern infrastructure rebuild especially high speed rail, a new modern power grid and ng fueling infrastructure with free money before the shtf.

The big reset is coming but who the hell knows when.
16 Nov 2012, 12:22 PM Reply Like

Yorick Comments (254)
 
How have we not woken up to find that Japan has devalued by 80%? Suppose they might have elderly retiree riots but printing is the same thing, just takes longer
16 Nov 2012, 01:42 PM Reply Like

bearfund Comments (1537)
 
Just as in the US, the yen has declined quite a lot relative to globally traded goods. The Japanese are paying a lot more yen for food and oil than they did in 1992, even though the JCPI hasn't changed at all. That means something else must have gotten cheaper, and that something else is Japanese goods and services. And the more local the good, the cheaper it's become, led by real estate. So it's a case of everything you have becoming cheaper and everything you need becoming more expensive. It's exactly what's happening in the US, and for all the same reasons: too much debt, and too much money printing aimed at inflating away that debt. At the root of it all are too many loans for too much money backed by things that weren't worth nearly as much as people borrowed to buy them. In both the US and Japan, the law provides various effective means of resolving that situation, but in both countries the powers that be have declined to utilise them. So instead we have QE-infinity and massive government deficits and a horde of zombie banks holding bad assets. There's nothing magical or surprising about any of this.
16 Nov 2012, 01:50 PM Reply Like

caupachow Comments (170)
 
why would BOJ not do QEi, it's working so great for us.
16 Nov 2012, 04:01 PM Reply Like