From: j
Sent: Thursday, June 13, 2013 6:37 AM
Subject: Re: great macro piece on Japan reflation apr 17, 2013
The "fiat money inflation" script says
Aud is high because australia is 'sounder' than all others in comparison, with <30m population and a lot of stuff
Japan shall not rise again because it is now well-in & all-in committed on a path to ruination. Its savings is what allows it to ruin longer.
Cs is correct, that other central banks must and shall join the printathon, with net net aggregate wins attributable to the "basics" = "everything we know" - "fiat money inflation" effects, that which we count on even as we seek to game on "everything we know"
"Everything we know" =
- inflation of the east / deflation of the west
- deadhand of demographics
- what makes things tick
- what makes things go tick-tock
-----Original Message-----
From: S
Date: Wed, 12 Jun 2013 12:20:29
Subject: FW: great macro piece on Japan reflation apr 17, 2013
Cs strategy on apr 16, 2013
1) for boj to get to 2% inflation tgt, cs estimates yen needs to fall to $110..maybe 120
2) japan is #1 in terms of macro scoreboard
3) boj policy will force other cbanks to join easing
4) favored inflation trades in japan are: financials, exporters ane real estate
5) in global trade, it's a zero sum game (wen's opinion), but a rising japan is direct negative for korea which is a direct competitor, not necessarily china
6) boj expansion of balance sheet is 2x greater than the fed, relative to their own gdp; boj balance sheet will rise to 60% in 2015 vs 30% in usa
7) 56% of retail assetsa re in cash; only 10% in equities
8) cs increase japan overweight from 6% to 16% and downgrades continental Europe
9) a weaker yen is not only good for exporters but because japan is a net foreign creditor of 60% of gdp, a weaker yen will make japan's foreign assets worth more when translated back to yen.
10) look at the yen weakness move in apr 1995 to aug 1998 when it moved from 85 to 145; today's moved from 75 to 103 is very early stage
11) even in 2013, there has been huge record selling of Nikkei by domestics but foreigners are at record buying levels
12) usa seems to have accepted weaker yen as a stronger japan will bolster usa's ally against china?
Japan is a short to med term macro long story; 1 to 2 year oppty but long term, the secular story is more bearish due to poor demographics, structural reforms, etc
Sidenote: aussie dollar is 55% overvalued on a ppp framework, despite Australia being a net intl debtor |
