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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (55950)	3/15/2006 10:02:52 AM
From: GST	Read Replies (1) \| Respond to of 110194

If you recall, there was a time when the yen was substantially stronger than it is now. Even back then, Toyota had achieved levels of productivity so high that they could operate in the black with the yen trading at 70 to the dollar. Japan is a rich country that chooses to conduct itself as if it was not rich. This is partly due to their mental state coming out of WWII. When your country is lying in ruins and people are starving in the streets you never lose that sense of "fear" of anything like that kind of brutal poverty ever happening again. IN the US we have no such fear -- far from it, we walk on ldeges and laugh. But people who went through the depression here in the 30s responded more like the Japanese who suffered so much 60 years ago. I had an elderly aunt -- very wealthy -- who owned a single piece of saran wrap that she washed and reused for years. In Japan, this war ravaged generation is now leaving the scene. If Japan let its currency find its own value in the marketplace, then only Bill Gates could afford to visit Tokyo for the weekend. China is nowhere near Japan on the wealth scale, but there are some similarities in outlook. One of these is the hangover from the cultural revolution. As I mentioned before, anybody in China who lived through the horrors -- the real horrors -- of the cultural revolution is prepared to back even the most strident government policies if they believe the alternative to be the kind of social chaos they experienced in the cultural revolution. This can have a lingering effect for decades to come. It is why the country's leaders decided to kill their own children in the streets while the world watched. And it is the reason why the rest of China stood by and did nothing, whatever sympathy they might have felt for those students who were wholesale slaughtered on the streets of Beijing.

To: russwinter who wrote (55950)	3/15/2006 12:42:24 PM
From: shades	Respond to of 110194

A strong currency is also a defacto increase (more global purchasing power) in the wealth holdings in Yen or Yuan of these folks, and would actually stimulate, not depress their domestic economies. As the majority population in japan and elsewhere go from worker to retiree I agree, they would want currency to be strong and savers rewarded. My redneck buddy used to tell me that the world is getting where we have too many chiefs and not enough indians however. Someone has to do the work, pick up the trash, clean out the plumbing, fix the food, build the cars we all want - etc etc. I have seen the friday night queue at red lobster go up from about 45 minutes to sometimes 2 hours now - too many old florida retirees and not enough poor young mexicans in there making the food fast enough - hehe. Hoening on FOX cost of FREEDOM last week said to give the SHAFT to the retirees and elderly in the USA and cut all thier promised benefits (ss, pensions, medicare etc etc) and take that money and spend on wars and military - the boys that actually pick up guns and shoot people to keep the oil flowing. Now he does call himself the "capitalistpig" but ethically I have serious reservations of giving the SHAFT to old people and I bet politicians globally that are voted into office also are not so easily willing to give the SHAFT to one of the best voting groups. If I was an old person in europe, japan, or the USA I would want to be able to trade a strong piece of paper that I had a lot of for nice dinners, plumbing work, cars, houses, trips, etc etc. If i was a young Hoening however - I might think there are too many chiefs and not enough indians. If it takes 20 indians to support one chief Grace Z up in her wegmans tower - and the number of indians is shrinking and chiefs growing - some of us just dont get wegmans. So if I understand you correctly, only poor countries with lots of youth need to keep weak currencies and grow exports, whereas the old geriatric groups need strong paper. So the government has a choice to make in usa, europe, and asia - reward the workers and youth at the cost of old and savers - or stick it HOENIG style to the old and reward the young and working. I am not familiar enough with japanese politics but I think perhaps they face the same issues as here in the USA. Who will win the next elections - the blue people champion who stands up for workers or the red people champion who wants to keep the chiefs rich at the cost of the indians. Not everyone can have the rich lifestyle with Hummers, red lobster, and fear factor every night shopping with Grace at wegmans. Increasing interest rates to at least normal rates serves the same purpose. These countries are long past the developing export model stage, time for them to move on. You make an excellent point Russ, if you have an aging population that can't work as hard or as long as when they were younger - you want to move away from worker based export economy to retiree based economy and have politician promises that appeals to the group with the most voting power. In the past perhaps to support more chiefs - we went and raided another indian tribe and took indians. Today we import mexicans in the USA - Japan doesn't seem to like those immigration policies - so they cant keep growing cheifs the way we seem to. A weak currency would be bad for thier aging population that cant work as hard.

To: russwinter who wrote (55950)	3/15/2006 1:08:06 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

"A strong currency is also a defacto increase (more global purchasing power) in the wealth holdings in Yen or Yuan of these folks, and would actually stimulate, not depress their domestic economies." And many argue a weak dollar is good for real estate, good for manufacturing... So where is the truth? Perhaps growing a real economy that can compete even with a strong dollar? We seemed to do it for bursts in the 80's and 90's.. Failed miserably in the 70's and most likely in the 00's though the jury is still out..