Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Chispas who wrote (66521)	7/10/2007 12:31:59 AM
From: John Metcalf	Read Replies (1) of 116555

Chispas, thanks for posting Mr. Schiff's article. Though I find his point of view a little bizarre, it is interesting and thought-provoking. It is a glaring omission that he did not mention the many years of deflation that have occurred in Japan. BOJ has made hundreds of statements about pursuing monetary policy to end deflation, so that banks and businesses can become solvent again. BOJ policy not only supports the USA, but also the Chinese currency to which USD are linked. It is conceivable that BOJ is looking at its export-driven economy, and seeing the opportunity to muscle three of the world's four largest economies into cooperation. Hyperinflation has not appeared in Japan. In fact, deflation is only ending recently. I would like to see Mr. Schiff's speculation about what Japanese households will do when Japan raises rates and yen finally begins to rise. Will they panic out of USD, or will BOJ spend yen to prevent the denouement? My bet has been, for many years, that BOJ will continue to do the latter. This bet is very large for me, so I would love to hear if I am wrong.

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