The implications, taken to an extreme, are almost too perverse. It's like science fiction. Because, in a cataclysmic unwind of the JPY that blows past the carry trade and then starts eating its way through Japan's net creditor position I think we get into an event that could qualify as one of the greatest events of the last 200 years.
So let's imagine a world where the JPY strengthens to 25 against both the USD and the EUR, 20 against the CAD and AUD, and then a heroic level against most EM currencies, of some level like 10. My levels may even be conservative, because at these levels, Japan is melting and so is the rest of the world.
But here is where we get into a strange boundary. Because as Japan is melting, it's ability to purchase the rest of the world is skyrocketing. So Japan's economy is effectively shut down, with 80% percent unemployment, and what's needed is food and shelter and oil. Well, Japan's ability to purchase these things is off the charts--it's purchasing power has gone hyperbolic.
David Foster Wallace should have been here to write the story, before the story actually unfolds.
Since he's not here, that leaves you to take up your pen.
G |
