To all, a few random thoughts on Japan vs the rest of the greedy investment world.
First of all, even Jim Cramer now knows that Japan is in recession. So, something must be done about them so that he can go ahead and keep buying Dell at 9 times sales and such. Let us put things in a Vulcan perspective.
1. What are Japan's options? The Wall Street, in order to continue to satiate their greed, wants the Japanese to cut taxes that would boost domestic spending. Problem solved. Right? Bob Ruebin, who really works for the Wall Street, not for the American tax payer, seems to second that proposal.
Get real, 48% of Japan's tax revenue is being used to service the public debt. And then there is need for the administration to pay bills, salaries and other committments. I don;t think there is much scope for them to cut taxes.
2. Bob Ruebin says he doesn't want to prop the Yen. He is just too tired of telling them what to do. That is some tough talk. Oh, really. Man, they have billions of $$$ locked in the treasuries here. Who is at whose mercy here, sir? If you are so concerned about setting things right, why not tell people to take caution before the crisis emerges, like now in US? After the fact, every tom dick and harry will have an opinion.
3. China now holds the key for the next potential killer dynamic in this. Yen doesn't stop the slide, Yuan gets devalued. US markets get killed. Period.
4. Yen continues to slide, Asia's recovery is backed off further. The wounded hero here is Japan. What are their options?
a) Keep quiet and do nothing. Well, it worked great thus far, doesn't it? There is an outside chance that it might help the US bubble to inflate further, though with further narrowed leadership. But, I doubt if the market forces will continue to be this stupid forever. In such cae (Japan keeps quiet) will the Chinese keep quiet? I bet they will not.
b) Raise rates and kill the stock market in Japan, but strengthen Yen. The money exodus stops. That will kill the US treasureis and US markets and the World goes in to recession.
c) Japanese will decide to sell the US treasuries, Yen stops the slide. Dollar weakens against the Yen. Sudden breaks to the US economy. Inflation risk due to the Dollar returning home. Kills the stock market here.
neither a) nor b) nor c) look like the options that will help this bloated stock market.
After all this, let me put my main point straight.
You borrow money from be and gave me a promisary note for 5% interest. You are spending left-and-right. Making merry. The hero in town. In the mean time, my house is in trouble. I need to set it in order. I need cash infusion - badly. So far, I really liked the 5% your were giving me. I have tried all the tricks at my disposal. Nothing worked. Since we are good friends, I was looking-up to you for some help. In stead, I came to know that you said you were tired of telling me how to set my house in order and you openly kept telling me that I just don't listen.
How do you think that makes me feel? When I am running out of options, would you blame me for demanding my money back. If it means hardships for you, should I care?
Think about it.
-MMV |
