Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (2534)	3/19/2004 4:22:26 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

does anyone else agree that Japan is primarly printing to keep the uS consumer alive rather tha for the specifics of exchange? Let me put it this way. Japan wants to remain competitive vs other currencies for the explicit purpose of having an advantage over other nations in selling goods to the US consumer. Mish

To: NOW who wrote (2534)	3/19/2004 6:42:48 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 116555

I think that part of the reason is that the BOJ is trying to inflate their own economy. As everyone knows, Japan has been suffering deflation for over a decade. They have tried low interest rates. They have run significant deficits trying to stimulate the economy, including public works projects (cementing half the country with bridges to nowhere). If they print more Yen, no one in Japan will take it. They are in a liquidity trap. So instead they print Yen, exchange the Yen for dollars (putting more Yen into circulation) and then buy US treasuries as security. This works better than buying their own debt, since the current plan has the added benefits (from Japan's perspective) of helping with the exchange rate AND keeping the US interest rates low. I think inflation is part of their strategy.