BillCust

What Would Create a Repeat of 1973?

Here is some numbers of the Yen Carry Trade as of March. That number is equivalent to US $800 Billion.
The question is then how much is too much? Consider this:
Japan is an actual country with actual people. They don't all trade the yen to invest in Australian$ or Brazilian bond, or Chinese stocks. They need yen to buy food, housing, cars, and the good things in life. A real crisis can happen when speculative yen demand interferes with the real economy demand of yen.

Take the M2 supply: deposit, cash, and quasi money - that number is 700 Trillion Yen, or 6 Trillion US$, or 6000 billion US$. A rule of thumb would suggest that a crisis could be in the making if the business/public suddenly compete with speculators to get Yen!

Currently we are at about 10-15% Yen money supply in terms of the amount being speculated! Common sense suggests to me that there is beginning to be a competition of demand for yen not just among speculators but business as well. I would say if we ever reached 100% of the money being loaned for speculation, there will be serious consequences in terms of regional monetary stabilities.

It's up to the Japanese government to determine whether there should be a stampede today or a monumental stampede later.