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 : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: borb who wrote (901)	4/15/1998 12:39:00 AM
From: ahhaha	Respond to of 3902

The tail does not wag the dog. Fixing an effect does nothing to fix the cause of the problem. In this case it just wastes money. Japanese money. The BOJ is literally throwing the stuff away. Something on the order of $11 billion. I am surprised, but I shouldn't be, that the BOJ missed the reality that there is a rising propensity to inflate in the US. They don't need to help the dollar down. The Japanese complain that we are insensitive to their needs and that we don't want to take the time to understand how the Japanese conduct society. It is now they who are insensitive about us. They aren't sensing this inflation potential. Of course, the best economics profs at MIT and Harvard aren't either. But we can understand their ignorance in that they have a predilection towards the mixed(up) economy (a little socialism, a little capitalism) and the endemic nature of inflation found there. The BOJ has no such excuse. The Asian financial crisis was a non-event. Just an excuse for a lot of clowns to shuffle paper. It takes no HK effort to stay aligned with the dollar since most transactions are internally settled in dollars there. Stimulating domestic expenditures for foreign goods in Japan is another make-work tail wagging exercise in futility. That isn't the problem. In fact, Japan doesn't really have any problem! That society spent 20 years competing their neighbors into the Stone Age and accordingly collected much of the world's wealth. They got intoxicated with the prosperity and became complacent. Eventually, the rest of the world studied Japan's use of free market capitalism, emulated it, and are now returning Japan to the Stone Age. The natural cycle is unfolding in Japan and part of the Schumpeteran process is the destruction of the indolent. If you accept the wealth creation of capitalism, you also have to accept the wealth destruction that makes capitalism so efficient. The US never accepted that side of the equation because the great economic intellects thought they could cause that side to vanish by manipulating the economic dog by its monetary tail. It failed and the result was 21% interest rates. Now the BOJ is re-learning those never-understood truths. The threat is runaway inflation in Japan. So the BOJ emulates the Burns FED, addresses a non-existent problem, but creates one through their pretense to knowledge. The world is moving to beggar-thy-neighbor inflation policies where whoever has the most inflation wins.