I wish to open a discussion of the future of Japan's economy going forward into the next decade.
Albeit, I cannot claim to be an expert on the intricacies of the world's 2nd largest economy,
anyone who studies the subject knows and would agree that the nation of Japan,
with an export-driven economic model, has and continues to walk on egg shells.
The fragile condition Japan finds itself in apparently has not improved to
any great degree over the last 6 or 7 years. When times were good, they were hurting.
Now that times are tough, they're still hurting.
Recent strength in the Yen, increased production costs, commodity inflation, asset depreciation
and every other problem the rest of the modernized world has been experiencing as of late is also plaguing Japan.
After 6 years of ZIRP and about a year of "almost ZIRP" at 0.50% still nothing has stimulated this economy.
As the BOJ has recently changed it's guard, nothing much else has changed.
Unlike the US Fed, they have nothing left to cut.
The way I see it, the only bullet left for Japan's Central Bank is to DEVALUE its currency.
Make it so cheap to buy from Japan that even the Chinese will buy from Japan.
Remember when a new Honda Accord was 13 to 15 Grand ?
Who's gonna buy a Chevy Malibu at an MSRP of $23,000 if a Camry sells for $16,000 again ?
That would mean war (atleast a trade war of sorts) and it does seem a bit far-fetched
to expect the Japanese govenment to take such drastic measures UNLESS
they have no other choice.
The possibilities for a major rebalancing and realignment of the world's financial flow could resurrect
the old "axis powers" of WWII: Germany's (ECB) Euro and Japan's Yen playing a tug-of war with the US Dollar.
These are some of my thoughts. If you live long enough, you'll see it all.
I could be totally of my rocker. Does anyone else think the Hibachi is starting to boil ?
Albeit, I cannot claim to be an expert on the intricacies of the world's 2nd largest economy,
anyone who studies the subject knows and would agree that the nation of Japan,
with an export-driven economic model, has and continues to walk on egg shells.
The fragile condition Japan finds itself in apparently has not improved to
any great degree over the last 6 or 7 years. When times were good, they were hurting.
Now that times are tough, they're still hurting.
Recent strength in the Yen, increased production costs, commodity inflation, asset depreciation
and every other problem the rest of the modernized world has been experiencing as of late is also plaguing Japan.
After 6 years of ZIRP and about a year of "almost ZIRP" at 0.50% still nothing has stimulated this economy.
As the BOJ has recently changed it's guard, nothing much else has changed.
Unlike the US Fed, they have nothing left to cut.
The way I see it, the only bullet left for Japan's Central Bank is to DEVALUE its currency.
Make it so cheap to buy from Japan that even the Chinese will buy from Japan.
Remember when a new Honda Accord was 13 to 15 Grand ?
Who's gonna buy a Chevy Malibu at an MSRP of $23,000 if a Camry sells for $16,000 again ?
That would mean war (atleast a trade war of sorts) and it does seem a bit far-fetched
to expect the Japanese govenment to take such drastic measures UNLESS
they have no other choice.
The possibilities for a major rebalancing and realignment of the world's financial flow could resurrect
the old "axis powers" of WWII: Germany's (ECB) Euro and Japan's Yen playing a tug-of war with the US Dollar.
These are some of my thoughts. If you live long enough, you'll see it all.
I could be totally of my rocker. Does anyone else think the Hibachi is starting to boil ?
