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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (5329)	12/13/2001 5:49:34 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 36161

what IS possible, and has been extensively discussed on longwaves, is that Japan will opt for a 'sudden' one time devaluation, that actually then forms the LOW point for the currency, as economic power shifts from the West to Asia in the next up wave. however, i myself have grave doubts that the willingness to devalue necessarily equates to the capability of doing so. i also doubt that a Japanese devaluation, which many regard as the only way of stopping the deflationary spiral and reconciling domestic debtors and creditors, will be able to achieve what it is advertised to achieve. the reason is that such a Yen devaluation would result in a string of competitive devaluations across South East Asia, including China this time. it is hard to see what exactly Japan would have gained if that happens. if the external value of the Yen falls, Japan's crisis could conceivably WORSEN instead of getting better, as higher yen denominated oil prices, instead of stoking inflation as is 'hoped' would only lead to Japanese consumers tightening the purse strings even more imo. as we have seen with the oil price rise of '99/'00, and as i have repeatedly pointed out at the time, higher oil prices actually have a DEflationary effect in a deflationary era, as they curtail purchasing power and eat away at profit margins. so i doubt that a Yen devaluation is really in Japan's interest, and i furthermore doubt that it can even be done. the BoJ has purchased some $35 billion over the past 2 months alone...increasing the size of its imprudently large dollar pile at an ever faster pace. imagine what it would have to do in order to actually effect a sizeable devaluation... PS: buying gold might be an idea, but not exactly a politically correct one at this time.