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Abenomics: Japan's economic revolution will rock our world. BOJ blows big bubble say experts.; Japanese people have a bubble every 50 years. Once Japan does have a bubble they do it really big.
Topic Started: 22 Jan 2013, 12:01 PM (13,763 Views)
Catweasel
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Catweasel say strange.

Now a SMH seem to write about a Japan on daily the basis.

Why it not the do in a 2012 and alert mouse to potential of short-term sexiness of a profit?

Good the chance that short-term now the fade away.

Best it stick to mouse house.
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Admin
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Quote:
 
A steroid injection for Japanese growth

Stephen Koukoulas
Published 7:03 AM, 7 Feb 2013

After two decades of deflationary funk, it looks like Japan’s recently elected Prime Minister Shinzo Abe is convincing the markets that his growth-at-all-costs approach just might work.

Japanese stocks are on a powerful bull run. That might be an understatement given the Nikkei rose 3.8 per cent yesterday to be a remarkable 32 per cent higher than the November low, the time when it seemed assured Abe would win the election and therefore be in a position to implement his radical economic agenda.

At the same time, the Japanese yen has fallen 18 per cent against the US dollar, which is the desired result for Abe as such a depreciation will boost the export competitiveness of Japan and provide impetus to higher inflation as import prices surge.

Abe was swept to power in December on a platform of economic reform. The so-called 'Three Arrows' approach focuses on:

1. Forcing the Bank of Japan to undertake aggressive quantitative easing and at the same time set a target for inflation of 2 per cent, while aiming for real GDP growth of 2 per cent.

2. A government sector infrastructure program with the fiscal stimulus measure funded from debt.

3. A strategy to support private sector investment.

The first two arrows are rapidly coming into play. The third arrow is yet to be fully fleshed out, although the weaker yen is giving Japan’s corporate sector a quite massive competitive boost.

At its heart, the strategy to boost private investment will likely have as its focus ‘flexibility’. Japan’s corporate sector is heavily regulated and as such, has been lethargic n adapting to the competitive pressures coming from China and other parts of Asia. In simple terms, Abe is wanting to reduce or even eliminate government controls and regulation, cut the size of the bureaucracy and eliminate anti-competitive laws.

This will be a massive challenge and indeed shock to much of conservative Japan.

Indeed, the ultra conservative Bank of Japan, one of the culprits in failing to kick-start Japan’s economy over the last two decades, is recoiling at the undermining of its independence under the First Arrow objective of boosting inflation and ramping up QE. Yesterday, BoJ Governor Masaaki Shirakawa and two of his deputies announced their decision to resign just three weeks before their scheduled departure, such is the radical force behind Prime Minister Abe’s reform.

According to reports, it was the early departure of these three policy dinosaurs from the BoJ that was the main catalyst for the sharp market moves, especially the jump in the Nikkei.

All of this matters. Not only for Japan itself, but for the global economy. Despite the 20 years of miserable economic performance, Japan remains the fourth largest economy in the world, having been overtaken by India only last year. It has the potential to be a significant contributor to global activity when conditions are once again strong.

There could well be some consequences, nonetheless, from what is rapidly unfolding in Japan.

Its move to drive the yen lower has sparked concerns about a global 'currency war'. The currency war describes the objectives of policy makers in Japan, the US, UK, China and elsewhere to artificially lower the value of their currency so that their exporters gain an unfair advantage against the rest of the world.

Japan’s move to see the yen fall comes on top of the massive quantitative easing from the US Federal Reserve, which has driven the US dollar lower. There has been a similar objective in the UK, where the Bank of England has debased the pound. Underlying the whole currency issue is perennial concern of the Chinese currency peg for the Chinese yuan, which on all measures points is significantly undervalued. There is no doubt that currency issues will be near the top of the agenda at the upcoming G20 Finance Ministers meeting, although it seems that little can be done to address the issue.

For now, Japan is gaining the upper hand with its bold economic policy reform. If what we are witnessing is just the start of a long run trend, Japan could have a truly strong economy in the next few years. That would be interesting.

Read more: http://www.businessspectator.com.au/bs.nsf/Article/japan-nikkei-economy-shinzo-abe-currency-war-pd20130207-4NRBT
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Enjoy The Ride
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Great news!

Abe has managed to create inflation in Japan, Brent is now at a 4 year high in Yen.

Rising input prices especially oil are not the best result for Japanese companies.

Popcorn anyone?


Enjoy The Ride!

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
― Friedrich A. von Hayek


"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.


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Catweasel
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Enjoy The Ride
14 Feb 2013, 11:20 AM
Great news!

Abe has managed to create inflation in Japan, Brent is now at a 4 year high in Yen.

Rising input prices especially oil are not the best result for Japanese companies.

Popcorn anyone?


Interesting.

Is a Japanese not allowed forward the contracts?

A secondly, can a japanese the corporation have the more negotiate power over oil price than funny little mouse in Australia?
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Elastic
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I'd be curious to hear what any MMTers have to say about this.
Given thatunemployment is very low in Japan it doesn't appear there is much slack in the Japanese economy. have got to imagine that large stimulus will produce wage increases that will offset any benefit that manufacturers might gain from a depreciating Yen.
Only a rat can win a rat race.

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Enjoy The Ride
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Catweasel
14 Feb 2013, 11:32 AM
Interesting.

Is a Japanese not allowed forward the contracts?

A secondly, can a japanese the corporation have the more negotiate power over oil price than funny little mouse in Australia?
Where do Japanese corporations negotiate the oil price?

I thought there was a futures market! Settled in USD or Yen?

Yes, they may very well be hedged as much as the Koreans and Chinese.

Is this a small shock? I was under the impression Abe is targeting inflation, for the good of all Japanese Mice.

Thankfully, the Japanese bicycle rider is sufficiently hedged against rising oil prices.


Enjoy The Ride!

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
― Friedrich A. von Hayek


"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.


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Enjoy The Ride
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After all the backslapping for Abe's agressive policy announcements, the Japanese picture is going south.

Abe has managed to devalue the yen and increase exports 6.4%

Just one small problem-Imports rose 7.3% Leading to a 1,380 Billion Yen trade deficit.

Currency devaluation is becoming a two edged sword for the energy importing Japanese. Net Net they are going backwards importing inflation at a faster rate than increasing exports.

So Keynsians & MMT folk, where to now?
Enjoy The Ride!

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
― Friedrich A. von Hayek


"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.


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Veritas
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Enjoy The Ride
22 Jan 2013, 03:33 PM
Japan now becomes the petri dish of mainstream economic theory. Abe has targeted inflation, the BOJ has lost is independence.

Hopefully, when this fails. We will see Krugman and his ilk slink from the limelight. We may be able to put this Keynsian garbage to bed.
Ah yes, because the Austrians and other goldbug crackpots have had a good recession?

They havent. They have been WRONG ABOUT EVERYTHING.

Where is the hyperinfation you promised us?

Where are the bond vigillantes?

Seriously, what will it take before you people realise that your models and basic assumptions have been PROVED to be full of shit.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Catweasel
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Veritas
21 Feb 2013, 12:14 PM
Ah yes, because the Austrians and other goldbug crackpots have had a good recession?

They havent. They have been WRONG ABOUT EVERYTHING.

Where is the hyperinfation you promised us?

Where are the bond vigillantes?

Seriously, what will it take before you people realise that your models and basic assumptions have been PROVED to be full of shit.
Catweasel say interesting.

Is Japan a poster child for full of the shit or just chin scratchers?

Who in charge of writing new textbook?

SMH?
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Ex BP Golly
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Elastic
14 Feb 2013, 12:26 PM
I'd be curious to hear what any MMTers have to say about this.
Given thatunemployment is very low in Japan it doesn't appear there is much slack in the Japanese economy. have got to imagine that large stimulus will produce wage increases that will offset any benefit that manufacturers might gain from a depreciating Yen.
It doesn't matter, just the mere idea of a bit more slop in the trough gets bubble surfers hard and randy.

They tell us that they didn't rely on bail outs and public welfare, because they are so smart "i bought a house!"

but a mere mention of more shade money frenzies the circle jerk.




Edited by Ex BP Golly, 21 Feb 2013, 01:42 PM.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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